In an attempt to identify transcription factors which activate sterol-regulatory element-binding protein 1c (SREBP-1c) transcription, we screened an expression cDNA library from adipose tissue of SREBP-1 knockout mice using a reporter gene containing the 2.6-kb mouse SREBP-1 gene promoter. We cloned and identified the oxysterol receptors liver X receptor (LXRalpha) and LXRbeta as strong activators of the mouse SREBP-1c promoter. In the transfection studies, expression of either LXRalpha or -beta activated the SREBP-1c promoter-luciferase gene in a dose-dependent manner. Deletion and mutation studies, as well as gel mobility shift assays, located an LXR response element complex consisting of two new LXR-binding motifs which showed high similarity to an LXR response element recently found in the ABC1 gene promoter, a reverse cholesterol transporter. Addition of an LXR ligand, 22(R)-hydroxycholesterol, increased the promoter activity. Coexpression of retinoid X receptor (RXR), a heterodimeric partner, and its ligand 9-cis-retinoic acid also synergistically activated the SREBP-1c promoter. In HepG2 cells, SREBP-1c mRNA and precursor protein levels were induced by treatment with 22(R)-hydroxycholesterol and 9-cis-retinoic acid, confirming that endogenous LXR-RXR activation can induce endogenous SREBP-1c expression. The activation of SREBP-1c by LXR is associated with a slight increase in nuclear SREBP-1c, resulting in activation of the gene for fatty acid synthase, one of its downstream genes, as measured by the luciferase assay. These data demonstrate that LXR-RXR can modify the expression of genes for lipogenic enzymes by regulating SREBP-1c expression, providing a novel link between fatty acid and cholesterol metabolism.