Certain oxysterols, when added to cultured cells, are potent regulators of cholesterol homeostasis, decreasing cholesterol synthesis and uptake and increasing cholesterol efflux. However, very little is known about whether or not endogenous oxysterol(s) plays a significant role in cholesterol homeostasis. 24(S),25-Epoxycholesterol (24,25EC) is unique among oxysterols in that it is produced in a shunt of the mevalonate pathway which also produces cholesterol. We investigated the role of endogenously produced 24,25EC using a novel strategy of overexpressing the enzyme 2,3-oxidosqualene cyclase in Chinese hamster ovary cells to selectively inhibit the synthesis of this oxysterol. First, loss of 24,25EC decreased expression of the LXR target gene, ABCA1, substantiating its role as an endogenous ligand for LXR. Second, loss of 24,25EC increased acute cholesterol synthesis, which was rationalized by a concomitant increase in HMG-CoA reductase gene expression at the level of SREBP-2 processing. Therefore, in the absence of 24,25EC, fine-tuning of the acute regulation of cholesterol homeostasis is lost, supporting the hypothesis that 24,25EC functions to protect the cell against the accumulation of newly synthesized cholesterol.