Although the function of liver fatty acid binding protein in hepatic fatty acid metabolism has been extensively studied, its potential role in hepatic cholesterol homeostasis is less clear. Although hepatic cholesterol accumulation was initially reported in L-FABP-null female mice, that study was performed with early N2 backcross generation mice. To resolve whether the hepatic cholesterol phenotype in these L-FABP(-/-) mice was attributable to genetic inhomogeneity, these L-FABP(-/-) mice were further backcrossed to C57Bl/6 mice up to the N10 (99.9% homogeneity) generation. Hepatic total cholesterol accumulation was observed in female, but not male, L-FABP(-/-) mice at all (N2, N4, N6, N10) backcross generations examined. The greater total cholesterol was due to increased hepatic levels of both unesterified (free) cholesterol and esterified cholesterol. Altered hepatic cholesterol accumulation correlated directly with L-FABP's ability to bind cholesterol with high affinity as shown by direct L-FABP binding of fluorescent cholesterol analogs (NBD-cholesterol, dansyl-cholesterol), a photoactivatable cholesterol analog [free cholesterol benzophenone (FCBP)], and free cholesterol (circular dichroism, isothermal titration microcalorimetry). One mole of fluorescent sterol was bound per mole of L-FABP. This was confirmed by photo-cross-linking studies with the photoactivatable cholesterol analog FCBP and by isothermal titration calorimetry with free cholesterol, which showed that L-FABP bound only one sterol molecule per L-FABP molecule. In contrast, the hepatic phenotype of male, but not female, L-FABP(-/-) mice was characterized by decreased hepatic triacylglycerol levels at all backcross generations examined. Taken together, these data support the hypothesis that L-FABP plays a role in physiological regulation of not only hepatic fatty acid metabolism, but also that of hepatic cholesterol.