The liver X receptors (LXRα and LXRβ) are members of the nuclear receptor superfamily that function as key transcriptional regulators of a number of biological processes, including cholesterol homeostasis, lipid metabolism, and keratinocyte differentiation. Natural ligands that activate LXRs include oxysterol derivatives such as 25-hydroxycholesterol, 27-hydroxycholesterol, 22(R)-hydroxycholesterol, 20(S)-hydroxycholesterol, and 24(S),25-epoxycholesterol. Related oxysterols, such as 5α,6α-epoxycholesterol (5,6-EC) are present in a number of foods and have been shown to induce atherosclerosis in animal models. Intriguingly, these oxysterols have also been detected in atherosclerotic plaques. Using a variety of biochemical and cellular assays, we demonstrate that 5,6-EC is the first dietary modulator and an endogenous LXR ligand with cell and gene context-dependent antagonist, agonist, and inverse agonist activities. In a multiplexed LXR-cofactor peptide interaction assay, 5,6-EC induced the recruitment of a number of cofactor peptides onto both LXRα and LXRβ and showed an EC(50) of approximately 2 μM in peptide recruitment. Furthermore, 5,6-EC bound to LXRα in a radiolabeled ligand displacement assay (EC(50) = 76 nM), thus demonstrating it to be one of the most potent natural LXRα ligands known to date. Analysis of endogenous gene expression in various cell-based systems indicated the potential of 5,6-EC to antagonize LXR-mediated gene expression. Furthermore, it also induced the expression of some LXR-responsive genes in keratinocytes. These results clearly demonstrate that 5,6-EC is an LXR modulator that may play a role in the development of lipid disorders, such as atherosclerosis, by antagonizing the agonistic action of endogenous LXR ligands.