Bile salt uptake, synthesis and secretion by the human hepatoma—derived cell line HepG2 were studied. The cells transported and secreted bile salts largely by means of passive mechanisms. The cells synthesized and secreted the normal human primary bile salts. The ratio of cholate to chenodeoxycholate was 1.5:1. The degree of conjugation, about 35%, was lower than normal, and the glycine-to-taurine ratio was abnormal (4.5:1). This was not due to amino acid deficiency in the medium. Contrary to the report of others, little 3α, 7α, 12α-trihydroxy-5β-cholestan-26-oic acid was secreted. This was confirmed by gas chromatography—mass spectrometry. The total rate of synthesis was about 33% that of normal liver. The specific activity of bile salts synthesized from [3H]mevalonate was about 20 times higher than that of the cellular cholesterol derived from the same precursor. The regulation of bile salt synthesis by two compounds that could alter the precursor pool of cholesterol was studied. After a 24-hr incubation in serum-free medium, the compound 25(OH)cholesterol inhibited the rate of bile salt synthesis compared with control values, possibly by depleting the intracellular free cholesterol pool. Surprisingly, however, progesterone, which inhibits cholesterol esterification and should have expanded this pool, also inhibited bile salt synthesis under those conditions. The effect of these compounds on the level of mRNA for cholesterol 7α-hydroxylase was also determined by Northern-blot analysis. The cholesterol 7α-hydroxylase mRNA was 3.7 kb, similar to that in the rat. The incubation of cells in 25(OH)cholesterol or progesterone, as above, resulted in a decreased level of mRNA. The reduction was proportional to the reduction in bile salt synthesis, suggesting that these compounds act at a pretranslational level. Taken together, these results suggest that our particular subclone of HepG2 cells will be useful for studies of the regulation of bile salt synthesis, but not of transport, by human liver—derived tissue. (Hepatology 1994;20:1522–1531).