Bile acids, steroids, and drugs activate steroid and xenobiotic receptor pregnane X receptor (PXR; NR1I2), which induces human cytochrome P4503A4 (CYP3A4) in drug metabolism and cholesterol 7 alpha-hydroxylase (CYP7A1) in bile acid synthesis in the liver. Rifampicin, a human PXR agonist, inhibits bile acid synthesis and has been used to treat cholestatic diseases. The objective of this study is to elucidate the mechanism by which PXR inhibits CYP7A1 gene transcription. The mRNA expression levels of CYP7A1 and several nuclear receptors known to regulate the CYP7A1 gene were assayed in human primary hepatocytes by quantitative real-time PCR (Q-PCR). Rifampicin reduced CYP7A1 and small heterodimer partner (SHP; NR02B) mRNA expression suggesting that SHP was not involved in PXR inhibition of CYP7A1. Rifampicin inhibited CYP7A1 reporter activity and a PXR binding site was localized to the bile acid response element-I. Mammalian two-hybrid assays revealed that PXR interacted with hepatic nuclear factor 4 alpha (HNF4 alpha, NR2A1) and rifampicin was required. Coimmunoprecipitation assay confirmed PXR interaction with HNF4 alpha. PXR also interacted with peroxisome proliferator-activated receptor gamma coactivator (PGC-1 alpha), which interacted with HNF4 alpha and induced CYP7A1 gene transcription. Rifampicin enhanced PXR interaction with HNF4 alpha and reduced PGC-1 alpha interaction with HNF4 alpha. Chromatin immunoprecipitation assay showed that PXR, HNF4 alpha, and PGC-1 alpha bound to CYP7A1 chromatin, and rifampicin dissociated PGC-1 alpha from chromatin. These results suggest that activation of PXR by rifampicin promotes PXR interaction with HNF4 alpha and blocks PGC-1 alpha activation with HNF4 alpha and results in inhibition of CYP7A1 gene transcription. Rifampicin inhibition of bile acid synthesis may be a protective mechanism against drug and bile acid-induced cholestasis.