The transcription of the gene (CYP7A1) encoding cholesterol 7alpha-hydroxylase, a key enzyme in cholesterol homeostasis, is repressed by bile acids via multiple mechanisms involving members of the nuclear receptor superfamily. Here, we describe a regulatory mechanism that can be exploited for modulating bile acid synthesis. By dissecting the mechanisms of CYP7A1 transcription, we found that bile acids stimulate the sequential recruitment of the histone deacetylases (HDACs) 7, 3, and 1, and of the corepressor SMRTalpha (silencing mediator of retinoid and thyroid receptors-alpha) and the nuclear corepressor. Bile acids, but not the farnesoid X receptor-selective agonist GW4064, increase the nuclear concentration of HDAC7, which promotes the assembly of a repressive complex that ultimately represses CYP7A1 transcription. Interestingly, despite its high basal expression level, small heterodimer partner (SHP) is associated with the CYP7A1 promoter only at a later stage of bile acid repression. Gene silencing with small interfering RNA confirms that HDAC7 is the key factor required for the repression of CYP7A1 transcription, whereas knockdown of SHP does not prevent the down-regulation of CYP7A1. Administration of the HDAC inhibitors valproic acid or trichostatin A to genetically hypercholesterolemic mice increases Cyp7a1 messenger RNA and bile acid synthesis and consequently markedly reduces total plasma and low-density lipoprotein cholesterol. CONCLUSION: By using a combination of molecular, cellular, and animal models, our study highlights the importance of HDACs in the feedback regulation of CYP7A1 transcription and identifies these enzymes as potential targets to modulate bile acid synthesis and for the treatment of hypercholesterolemia.