The TGFbeta1/Smad pathway plays a critical role in cholestasis and liver fibrosis. Previous studies show that TGFbeta1, TNFalpha, and insulin inhibit cholesterol 7alpha-hydroxylase (CYP7A1) gene transcription and bile acid synthesis in human hepatocytes. In this study, we investigated insulin, TGFbeta1, and TNFalpha regulation of rat Cyp7a1 gene transcription. In contrast to inhibition of human CYP7A1 gene transcription, TGFbeta1 stimulates rat Cyp7a1 reporter activity. Smad3, FoxO1, and HNF4alpha synergistically stimulated rat Cyp7a1 gene transcription. Mutations of the Smad3, FoxO1, or HNF4alpha binding site attenuated the rat Cyp7a1 promoter activity. Furthermore, TNFalpha and cJun attenuated TGFbeta1 stimulation of rat Cyp7a1. Insulin or adenovirus-mediated expression of constitutively active AKT1 inhibited FoxO1 and Smad3 synergy. In streptozotocin-induced diabetic rats, Cyp7a1 mRNA expression levels were induced and insulin attenuated CYP7A1 mRNA levels. Chromatin immunoprecipitation assay showed that FoxO1 binding to Cyp7a1 chromatin was increased in diabetic rat livers and insulin reduced FoxO1 binding. These results suggest a mechanistic basis for induction of Cyp7a1 activity and bile acid synthesis in cholestatic rats and in diabetic rats. The crosstalk of insulin, TGFbeta and TNFalpha signaling pathways may regulate bile acid synthesis and lipid homeostasis in diabetes, fatty liver disease, and liver fibrosis.