The molecular mechanism of how hepatocytes maintain cholesterol homeostasis has become much more transparent with the discovery of sterol regulatory element binding proteins (SREBPs) in recent years. These membrane proteins are members of the basic helix-loop-helix-leucine zipper (bHLHZip) family of transcription factors. They activate the expression of at least 30 genes involved in the synthesis of cholesterol and lipids. SREBPs are synthesized as precursor proteins in the endoplasmic reticulum (ER), where they form a complex with another protein, SREBP cleavage activating protein (SCAP).The SCAP molecule contains a sterol sensory domain. In the presence of high cellular sterol concentrations SCAP confines SREBP to the ER. With low cellular concentrations, SCAP escorts SREBP to activation in the Golgi. There, SREBP undergoes two proteolytic cleavage steps to release the mature, biologically active transcription factor, nuclear SREBP (nSREBP). nSREBP translocates to the nucleus and binds to sterol response elements (SRE) in the promoter/enhancer regions of target genes. Additional transcription factors are required to activate transcription of these genes. Three different SREBPs are known, SREBPs-1a, -1c and -2. SREBP-1a and -1c are isoforms produced from a single gene by altate splicing. SREBP-2is encoded by a different gene and does not display any isoforms. It appears that SREBPs alone, in the sequence described above, can exert complete control over cholesterol synthesis, whereas many additional factors (hormones,cytokines, etc.) are required for complete control of lipid metabolism. Medicinal manipulation of the SREBP/SCAP system is expected to prove highly beneficial in the management of cholesterol-related disease.