We investigated whether expression of cholesterol ester transfer protein (CETP) in mice alters the regulation of cholesterol metabolism. Transgenic mice expressing human CETP (CETP-TG) and nontransgenic littermates (non-TG) were fed either a monounsaturated fatty acid (MUFA) or a saturated fatty acid (SFA)-rich diet in the presence or absence of cholesterol. Mice fed with MUFA diet had higher CETP activity compared with SFA-fed mice. Addition of cholesterol to the MUFA diet decreased CETP activity, whereas addition of cholesterol to the SFA diet had no effect. Cholesterol 7alpha-hydroxylase (Cyp7a) activity was higher in CETP-TG mice compared with non-TG mice when fed a MUFA diet, whereas SFA fed CETP-TG mice showed lower Cyp7a activity as compared with non-TG. Microsomal triglyceride transfer protein (MTTP) activity was higher in CETP-TG mice compared with non-TG mice when fed a MUFA diet. HMG-CoA reductase activity was lower in CETP-TG mice compared with non-TG mice when fed a MUFA or a SFA diet. These data demonstrate that the regulation of Cyp7a, HMG-CoA reductase, and MTTP is altered in CETP-TG mice as compared with non-TG mice and these alterations are further modulated by the quality of dietary fats. These findings highlight the importance of CETP in regulating cholesterol homeostasis.