6-Azacholest-4-en-3 beta-ol-7-one (azacholesterol) was shown to be a specific inhibitor of cholesterol 7 alpha-hydroxylase. It inhibited cholesterol hydroxylation by a rat liver microsomal preparation with non-competitive kinetics and a Ki of 4 microM. No evidence was found for a time-dependent inhibition of activity. Azacholesterol did not inhibit acyl-CoA: cholesterol acyltransferase or 3-hydroxy-3-methylglutaryl coenzyme A reductase in rat liver microsomal preparations, or cholesterol esterification and synthesis in primary cultures of rat hepatocytes. The synthesis of bile acids was inhibited by azacholesterol in these cells in a dose-dependent way. When bile acid synthesis was inhibited by azacholesterol, newly-synthesized cholesterol from exogenous mevalonate was secreted by the hepatocyte cultures into the cell culture medium in several-fold excess over control incubations. No changes in the secretion of cholesteryl ester occurred in the presence of azacholesterol. This observation suggests that newly synthesised cholesterol that has entered the substrate pool for hydroxylation is no longer accessible to the substrate pool for esterification. This is further evidence for the compartmentation of cholesterol metabolism in the hepatocyte.