Oxysterols are key regulators of lipid metabolism and regulate gene expression by activating the liver X receptor (LXR). LXR plays a vital role in macrophage foam cell formation, a central event in atherosclerosis. It is known that addition of exogenous oxysterols to cultured macrophages activates LXR, leading to increased expression of ABCA1 and cholesterol efflux. In this study, we tested the novel hypothesis that stimulation of endogenous oxysterol synthesis would block foam cell formation induced by atherogenic lipoproteins. Macrophage synthesis of 24(S),25-epoxycholesterol, a potent LXR ligand, increased 60-fold by partial inhibition of 2,3-oxidosqualene:lanosterol cyclase (OSC), a microsomal enzyme in both the cholesterol biosynthetic pathway and the alternative oxysterol synthetic pathway. When macrophages were challenged with human hypertriglyceridemic VLDL (HTG-VLDL), cellular cholesteryl ester accumulation increased 12-fold. This was reduced dramatically, by 65%, after preincubation with an OSC inhibitor (OSCi). The HTG-VLDL–induced accumulation of macrophage TG (70-fold) was unaffected by the OSCi or exogenous 24(S),25-epoxycholesterol, an effect associated with suppression of SREBP-1 processing. By contrast, TO901317, a synthetic LXR agonist, increased cellular TG significantly and markedly increased SREBP-1 processing. OSC inhibition decreased HTG-VLDL uptake through downregulation of LDL-receptor expression, despite substantial inhibition of cholesterol synthesis. Furthermore, OSC inhibition significantly upregulated ABCA1 and ABCG1 expression, which led to enhanced macrophage cholesterol efflux, an effect mediated through LXR activation. Therefore, increased macrophage synthesis of endogenous oxysterols represents a new mechanism for the dual regulation of LXR- and SREBP-responsive genes, an approach that inhibits foam cell formation without detrimental effect on TG synthesis.