The mechanism for the increase in plasma cholesterol levels in cholesterol-fed rats following chylomicron transport was investigated in intact animals, in isolated perfused liver, and in hepatocytes in monolayer cultures. Intravenous administration of egg phosphatidylcholine in amounts greater than those required to cause a plasma cholesterol response when given as chylomicrons was without effect. This makes it unlikely that increased plasma cholesterol levels resulted from the recruitment of tissue cholesterol by the plasma chylomicron phospholipids that persisted in the plasma after triacylglycerol clearance. The hepatic origin of the increased plasma cholesterol levels was directly confirmed by two hepatic perfusion experiments. When cholesterol-fed rats received intravenous chylomicrons prior to isolated hepatic perfusion, more cholesterol was secreted by the liver than when the rats were injected intravenously with buffer. Perfusion of apolipoprotein E (apo E)-rich triacylglycerol emulsions through the livers also enhanced cholesterol secretion. The increase in hepatocyte cholesterol secretion seen with cholesterol-fed rats was also noted in monolayer cultures following incubation with apo E rich-triacylglycerol emulsions. The apolipoprotein or the emulsion alone, or apo E-rich phosphatidylcholine liposomes, had no effect. The data confirm previous indirect observations that the liver is the source of cholesterol that appears in plasma following transport of chylomicrons or following a lipid-rich meal in cholesterol-fed rats. The data also re-emphasize the importance of providing apo E with triacylglycerol emulsions to initiate secretion of lower density lipoproteins by the liver.