We have previously shown that in Hep G2 cells and human hepatocytes, as compared with fibroblasts, the low-density lipoprotein (LDL) receptor activity is only weakly down-regulated after incubation of the cells with LDL, whereas incubation with high-density lipoproteins (HDL) of density 1.16-1.20 g/ml (heavy HDL) strongly increased the LDL-receptor activity. To elucidate this difference between hepatocytes and fibroblasts, we studied the cellular cholesterol homoeostasis in relation to the LDL-receptor activity in Hep G2 cells. (1) Interrupting the cholesteryl ester cycle by inhibiting acyl-CoA: cholesterol acyltransferase (ACAT) activity with compound 58-035 (Sandoz) resulted in an enhanced LDL-mediated down-regulation of the receptor activity. (2) The stimulation of the receptor activity by incubation of the cells with cholesterol acceptors such as heavy HDL was not affected by ACAT inhibition. (3) Incubation of the Hep G2 cells with LDL, heavy HDL or a combination of both grossly affected LDL-receptor activity, but did not significantly change the intracellular content of free cholesterol, suggesting that in Hep G2 cells the regulatory free cholesterol pool is small as compared with the total free cholesterol mass. (4) We used changes in ACAT activity as a sensitive (indirect) measure for changes in the regulatory free cholesterol pool. (5) Incubation of the cells with compactin (2 microM) without lipoproteins resulted in a 4-fold decrease in ACAT activity, indicating that endogenously synthesized cholesterol is directed to the ACAT-substrate pool. (6) Incubation of the cells with LDL or a combination of LDL and heavy HDL stimulated ACAT activity 3-5 fold, whereas incubation with heavy HDL alone decreased ACAT activity more than 20-fold. Our results suggest that in Hep G2 cells exogenously delivered (LDL)-cholesterol and endogenously synthesized cholesterol are primarily directed to the cholesteryl ester (ACAT-substrate) pool or, if present, to extracellular cholesterol acceptors (heavy HDL) rather than to the free cholesterol pool involved in LDL-receptor regulation.