Cholesterol 7α-hydroxylase (CYP7A1) of the bile acid biosynthesis pathway is suppressed by bile acids and inflammatory cytokines. Bile acids are known to induce inflammatory cytokines to activate the mitogen-activated protein kinase/c-Jun N-terminal kinase (JNK) signaling pathway that inhibits CYP7A1 gene transcription. c-Jun has been postulated to mediate bile acid inhibition of CYP7A1. However, the c-Jun target involved in the regulation of CYP7A1 is unknown. Human primary hepatocytes and HepG2 cells were used as models to study chenodeoxycholic acid (CDCA) and interleukin-1β (IL-1β) regulation of human CYP7A1 gene expression via real-time polymerase chain reaction, reporter assays, co-immunoprecipitation and chromatin immunocipitation (ChIP) assays. IL-1β and CDCA reduced CYP7A1 but induced c-Jun messenger RNA expression in human primary hepatocytes. IL-1β inhibited human CYP7A1 reporter activity via the HNF4α binding site. A JNK-specific inhibitor blocked the inhibitory effect of IL-1β on HNF4α expression and CYP7A1 reporter activity. c-Jun inhibited HNF4α and PPARγ coactivator-1α (PGC-1α) coactivation of CYP7A1 reporter activity, whereas a dominant negative c-Jun did not. Co-immunoprecipitation and ChIP assays revealed that IL-1β and CDCA reduced HNF4α bound to the CYP7A1 chromatin, and that c-Jun interacted with HNF4α and blocked HNF4α recruitment of PGC-1α to the CYP7A1 chromatin. In conclusion, IL-1β and CDCA inhibit HNF4α but induce c-Jun, which in turn blocks HNF4α recruitment of PGC-1α to the CYP7A1 chromatin and results in inhibition of CYP7A1 gene transcription. The JNK/c-Jun signaling pathway inhibits bile acid synthesis and protects hepatocytes against the toxic effect of inflammatory agents. (HEPATOLOGY 2006;43:1202–1210.)