1. An eightfold increase in the incorporation of [2-(14)C]acetate into liver cholesterol in vivo was observed 24hr. after starved rats had been given actinomycin D (0.5mg./kg. of body wt.). Liver cholesterol radioactivity declined faster in the treated animals, suggesting a greater rate of cholesterol turnover. 2. Liver slices from treated animals showed a tenfold increase in the incorporation of [2-(14)C]acetate into cholesterol; conversion into CO(2) and into fatty acids was less markedly increased, and conversion into ketone bodies was not significantly affected. 3. The patterns of conversion into liver cholesterol in vivo of the lactone and the sodium salt of mevalonic acid differed markedly. The former was converted at a faster rate and to a greater extent than the latter. Treatment with actinomycin D increased the conversion of both forms of mevalonic acid into liver cholesterol, but only to a small extent. 4. Stimulation of the incorporation of acetate into cholesterol occurred at 4hr. after the administration of actinomycin D but not at 2hr. The response was abolished by the simultaneous administration of dl-ethionine or puromycin. 5. Pre-feeding with a cholesterol-rich diet greatly diminished the stimulation of conversion of acetate into cholesterol caused by actinomycin D, though it did not completely suppress it. Adrenalectomized animals responded to the drug, but much less markedly. 6. It is concluded that actinomycin D stimulates the synthesis of cholesterol in the liver at a stage in the pathway before mevalonic acid, by a mechanism that probably requires protein synthesis. A likely site would be the beta-hydroxy-beta-methylglutaryl-CoA reductase, the rate-limiting enzyme in cholesterol biosynthesis. Some possible mechanisms by which the drug may lead to increased activity of this enzyme are considered.