Rat hepatoma cells (Fu5AH) were studied as a model for the net delivery of apoE-free high-density lipoprotein (HDL) cholesterol to a cell. Incubating cells with HDL results in 1) a decrease in both media-free cholesterol and cholesteryl ester concentration; 2) decreased cell sterol synthesis; and 3) increased cell cholesteryl ester synthesis. HDL cholesteryl ester uptake is increased when cells are incubated for 18 hr in cholesterol poor media. Coincubation of 3H-cholesteryl ester-labeled low-density lipoprotein (LDL) with 50 microM chloroquine or 25 microM monensin results in a decrease in the cellular free cholesterol/cholesteryl ester (FC/CE) isotope ratio, indicating an inhibition in the conversion of cholesteryl ester to free cholesterol. In contrast, chloroquine and monensin do not alter the cellular FC/CE isotope ratio for 3H-CE HDL. This evidence indicates that acidic lysosomal cholesteryl ester hydrolase does not account for the hydrolysis of HDL-CE. Free cholesterol generated from 3H-cholesteryl ester of both LDL and HDL is reesterified intracellularly. At higher HDL concentrations (above 50 micrograms/ml) HDL cholesteryl ester hydrolysis is sensitive to chloroquine. We propose that an extralysosomal pathway is operating in the metabolism of HDL cholesterol and that at higher HDL concentrations a lysosomal pathway may be functioning in addition to an extralysosomal pathway.