CYP8B1 is involved in synthesis of cholic acid from cholesterol in the bile acid biosynthesis pathway in the liver. CYP8B1 mRNA expression is elevated upon glucagon or cAMP treatment in human primary hepatocytes and in fasted mice. Here we investigated the underlying mechanisms of fasting induction of cyp8b1. RORα (NR1F1) is a constitutively active nuclear receptor that binds cholesterol and plays a role in regulation of glucose and lipid metabolism. RORα activates both human and mouse CYP8B1 promoter reporter activity stimulated by cAMP. Site‐directed mutagenesis and electrophoretic mobility shift assay revealed a putative RORα response element located in the human and mouse CYP8B1 gene promoters. Adenovirus‐mediated transduction of RORα increased CYP8B1 mRNA in human primary hepatocytes, while siRNA knockdown of RORα in HepG2 cells blocked cAMP induction of CYP8B1. Nuclear receptor co‐activators SRC2 and CBP, and cAMP stimulated RORα induction of CYP8B1 reporter activity. Chromatin immunoprecipitation assay showed that cAMP enhanced RORα and CBP occupancy to the CYP8B1 promoter. Mammalian two‐hybrid assay showed that RORα interacted with CBP, while 7α‐hydroxylcholesterol, an inverse agonist of RORα, inhibited this interaction. This study suggests that RORα plays a role in induction of CYP8B1 during fasting. RORα may be an oxysterol sensor that regulates bile acid synthesis and cholesterol metabolism in the liver.