We investigated the roles of hydrophobic deoxycholic acid (DCA) and hydrophilic ursocholic acid (UCA) in the regulation of the orphan nuclear farnesoid X receptor (FXR) in vivo. Rabbits with bile fistula drainage (removal of the endogenous bile acid pool), rabbits with bile fistula drainage and replacement with either DCA or UCA, and intact rabbits fed 0.5% cholic acid (CA) (enlarged endogenous bile acid pool) were studied. After bile fistula drainage, cholesterol 7alpha-hydroxylase (CYP7A1) mRNA and activity levels increased, FXR-mediated transcription was decreased, and FXR mRNA and nuclear protein levels declined. Replacing the enterohepatic bile acid pool with DCA restored FXR mRNA and nuclear protein levels and activated FXR-mediated transcription as evidenced by the increased expression of its target genes, SHP and BSEP, and decreased CYP7A1 mRNA level and activity. Replacing the bile acid pool with UCA also restored FXR mRNA and nuclear protein levels but did not activate FXR-mediated transcription, because the SHP mRNA level and CYP7A1 mRNA level and activity were unchanged. Feeding CA to intact rabbits expanded the bile acid pool enriched with the FXR high affinity ligand, DCA. FXR-mediated transcription became activated as shown by increased SHP and BSEP mRNA levels and decreased CYP7A1 mRNA level and activity but did not change FXR mRNA or nuclear protein levels. Thus, both hydrophobic and hydrophilic bile acids are effective in maintaining FXR mRNA and nuclear protein levels. However, the activating ligand (DCA) in the enterohepatic flux is necessary for FXR-mediated transcriptional regulation, which leads to down-regulation of CYP7A1.