The metabolism of 27-hydroxycholesterol and 25-hydroxycholesterol was studied in cultures of human diploid fibroblasts. Both steroids underwent 7 alpha-hydroxylation with subsequent oxidation to 7 alpha-hydroxy-3-oxo-delta 4 steroids. A minor fraction of the 27-hydroxysteroids was oxidized to acids. Competition experiments indicated that both hydroxycholesterols were hydroxylated by the same enzyme, different from cholesterol 7 alpha-hydroxylase. 7 alpha,25-Dihydroxycholesterol suppressed the activity of HMG-CoA reductase at least as effectively as 25-hydroxycholesterol whereas 7 alpha,25-dihydroxy-4-cholesten-3-one was a less effective suppressor. The results suggest that cholesterol might be converted to 7 alpha-hydroxylated bile acid precursors in extrahepatic tissues in vivo and that the regulation of the activity of HMG-CoA reductase by oxysterols might be modulated by 7 alpha-hydroxylation and subsequent oxidation by 3 beta-hydroxy-delta 5-C27-steroid dehydrogenase/isomerase.