The effect of rapid changes in cellular cholesterol content on adenosine 3',5'-cyclic monophosphate (cAMP) response element-mediated gene transcription was investigated. The study was carried out in Chinese hamster ovary (CHO-K1) cells permanently expressing the human beta(2)-adrenoceptor. Gene transcription was quantified using a reporter gene (secreted placental alkaline phosphatase) under the transcriptional control of cAMP response element (CRE) sequences. Cellular cholesterol was reduced by 42% or elevated by 47% by incubating cells for 1 hr with methyl-beta-cyclodextrin alone or methyl-beta-cyclodextrin complexed with cholesterol, respectively. There was a significant negative correlation between the free cholesterol content of the cells and CRE-mediated gene expression in response to 10(-6) M isoprenaline (slope = -4.57 +/- 0.73, P < 0.001), indicating that beta(2)-adrenoceptor-mediated activation of the CRE is inhibited by cholesterol. Cyclic AMP accumulation in response to isoprenaline (10(-12) to 10(-5) M) was also inhibited in cholesterol-enriched cells and enhanced in cholesterol-depleted cells compared to controls (P < 0.05, two-way ANOVA). Cholesterol also inhibited serum-mediated enhancement of CRE-driven gene expression, and we present data suggesting that the pathway activated by serum and inhibited by cholesterol could be independent of adrenoceptor activation and protein kinase A. We conclude that in CHO-K1 cells cholesterol inhibits at least two processes that can stimulate CRE-mediated gene expression. One is isoprenaline activation of cAMP synthesis, the other is activated by serum. These findings demonstrate that activation of gene transcription by extracellular stimuli could be influenced by cellular cholesterol content.