It is known that hepatic levels of reduced glutathione correlate with the activity of the liver-specific enzyme cholesterol-7alpha-hydroxylase. We examined the possibility that sulfhydryl reducing agents activate transcription of cholesterol 7alpha-hydroxylase. Adding dithiothreitol (DTT, 1 mM) and dexamethasone to L35 hepatoma cells increased the content of 7alpha-hydroxylase mRNA 3-fold above the levels observed with dexamethasone alone. Without dexamethasone, DTT had no affect. The addition of reduced glutathione to L35 cells demonstrated a similar potentiation of expression dependent on dexamethasone. Nuclear run-on assays showed that in the presence of both dexamethasone and DTT, the transcription of the 7alpha-hydroxylase gene was clearly increased. In contrast, by itself, dexamethasone did not cause a detectable increase in the transcription of the 7alpha-hydroxylase gene. Dexamethasone and DTT did not affect the transcription of beta-actin, suggesting a selective induction of the 7alpha-hydroxylase gene. DTT reversed repression of 7alpha-hydroxylase expression by insulin but not the repression by phorbol ester. Our data show for the first time that the sulfhydryl redox potential of the hepatocyte (i.e. level of reduced glutathione) has a marked influence on the transcription and expression of the liver-specific gene 7alpha-hydroxylase.