Cholesterol biosynthesis and uptake are controlled by a classic end product-feedback mechanism whereby elevated cellular sterol levels suppress transcription of the genes encoding 3-hydroxy-3-methylglutaryl coenzyme A (HMG-CoA) synthase, HMG-CoA reductase, and the low-density lipoprotein receptor. The 5'-flanking region of each gene contains a common cis-acting element, designated the sterol regulatory element (SRE), that is required for transcriptional regulation. In this report, we describe mutant Chinese hamster ovary (CHO) cell lines that lack SRE-dependent transcription. Mutant cell lines were isolated on the basis of their ability to survive treatment with amphotericin B, a polyene antibiotic that kills cells by interacting with cholesterol in the plasma membrane. Four mutant lines (SRD-6A, -B, -C, and -D) were found to be cholesterol auxotrophs and demonstrated constitutively low levels of mRNA for all three sterol-regulated genes even under conditions of sterol deprivation. The mutant cell lines were found to be genetically recessive, and all four lines belonged to the same complementation group. When transfected with a plasmid containing a sterol-regulated promoter fused to a bacterial reporter gene, SRD-6B cells demonstrated constitutively low levels of transcription, in contrast to wild-type CHO cells, which increased transcription under conditions of sterol deprivation. Mutation of the SREs in this plasmid prior to transfection reduced the level of expression in wild-type CHO cells deprived of sterols to the level of expression found in SRD-6B cells. The defect in SRD-6 cells is limited to transcriptional regulation, since posttranscriptional mechanisms of sterol-mediated regulation were intact: the cells retained the ability to posttranscriptionally suppress HMG-CoA reductase activity and to stimulate acyl-CoA:cholesterol acyltransferase activity. These results suggest that SRD-6 cells lack a factor required for SRE-dependent transcriptional activation. We contrast these cells with a previously isolated oxysterol-resistant cell line (SRD-2) that lacks a factor required for SRE-dependent transcriptional suppression and propose a model for the role of these genetically defined factors in sterol-mediated transcriptional regulation.