Diabetic dyslipidemia requires simultaneous treatment with hypoglycemic agents and lipid-modulating drugs. We recently described glycogen phosphorylase inhibitors that reduce glycogenolysis in cells and lower plasma glucose in ob/ob mice (J. Med. Chem., 41: 2934, 1998). In evaluating the series prototype, CP-320626, in dogs, up to 90% reduction in plasma cholesterol was noted after 2 week treatment. Cholesterol reductions were also noted in ob/ob mice and in rats. In HepG2 cells, CP-320626 acutely and dose-dependently inhibited cholesterolgenesis without affecting fatty acid synthesis. Inhibition occurred together with a dose-dependent increase in the cholesterol precursor, lanosterol, suggesting that cholesterolgenesis inhibition was due to lanosterol 14alpha-demethylase (CYP51) inhibition. In ob/ob mice, acute treatment with CP-320626 resulted in a decrease in hepatic cholesterolgenesis with concomitant lanosterol accumulation, further implicating CYP51 inhibition as the mechanism of cholesterol lowering in these animals. CP-320626 and analogs directly inhibited rhCYP51, and this inhibition was highly correlated with HepG2 cell cholesterolgenesis inhibition (R2 = 0.77). These observations indicate that CP-320626 inhibits cholesterolgenesis via direct inhibition of CYP51, and that this is the mechanism whereby CP-320626 lowers plasma cholesterol in experimental animals. Dual-action glycogenolysis and cholesterolgenesis inhibitors therefore have the potential to favorably affect both the hyperglycemia and the dyslipidemia of type 2 diabetes.