We have shown previously that bile acids can activate the JNK pathway and down-regulate cholesterol 7alpha-hydroxylase (CYP7A1), the rate-limiting enzyme in the neutral pathway of bile acid biosynthesis. In this study, the mechanism(s) by which deoxycholic acid (DCA) activates the JNK pathway were examined. FAS receptor (FAS-R) and acidic sphingomyelinase (ASM)-deficient hepatocytes were resistant to DCA-induced activation of the JNK pathway. Activation of the JNK pathway (2-3-fold) in response to tumor necrosis factor-alpha was similar in both wild-type and FAS-R(-/-) hepatocytes. In wild-type and FAS-R(-/-) hepatocytes, ceramide elevation was detected as early as 2 min and peaked at 10 min after DCA treatment. In contrast, ASM(-/-) hepatocytes were defective in DCA-induced ceramide generation. Treatment with DCA resulted in movement of FAS-R to the cell surface, which was blocked upon treatment with brefeldin A. However, brefeldin A failed to block DCA-mediated JNK activation in wild-type hepatocytes. DCA-induced JNK activation was independent of either the epidermal growth factor receptor activation or free radical generation. Addition of ASM to rat hepatocytes activated JNK and down-regulated CYP7A1 mRNA levels. In conclusion, these results show that DCA activates JNK and represses CYP7A1 mRNA levels in primary hepatocytes via an ASM/FAS-R-dependent mechanism that is independent of either the epidermal growth factor receptor or free radical generation.