Hepatocyte nuclear factor 4alpha (HNF4alpha) has an important role in regulating the expression of liver-specific genes. Because bile acids are produced from cholesterol in liver and many enzymes involved in their biosynthesis are preferentially expressed in liver, the role of HNF4alpha in the regulation of bile acid production was examined. In mice, unconjugated bile acids are conjugated with taurine by the liver-specific enzymes, bile acid-CoA ligase and bile acid-CoA:amino acid N-acyltransferase (BAT). Mice lacking hepatic HNF4alpha expression exhibited markedly decreased expression of the very long chain acyl-CoA synthase-related gene (VLACSR), a mouse candidate for bile acid-CoA ligase, and BAT. This was associated with markedly elevated levels of unconjugated and glycine-conjugated bile acids in gallbladder. HNF4alpha was found to bind directly to the mouse VLACSR and BAT gene promoters, and the promoter activities were dependent on HNF4alpha-binding sites and HNF4alpha expression. In conclusion, HNF4alpha plays a central role in bile acid conjugation by direct regulation of VLACSR and BAT in vivo.