We compared the abilities of cholesterol versus various oxysterols as substrate and/or as activator for the enzyme acyl-coenzyme A:cholesterol acyltransferase (ACAT), by monitoring the activity of purified human ACAT1 in response to sterols solubilized in mixed micelles or in reconstituted vesicles. The results showed that 5 alpha,6 alpha-epoxycholesterol and 7 alpha-hydroxycholesterol are comparable with cholesterol as the favored substrates, whereas 7-ketocholesterol, 7 beta-hydroxycholesterol, 5 beta,6 beta-epoxycholesterol, and 24(S),25-epoxycholesterol are very poor substrates for the enzyme. We then tested the ability of 7-ketocholesterol as an activator when cholesterol was measured as the substrate, and vice versa. When cholesterol was measured as the substrate, the addition of 7-ketocholesterol could not activate the enzyme. In contrast, when 7-ketocholesterol was measured as the substrate, the addition of cholesterol significantly activated the enzyme and changed the shape of the substrate saturation curve from sigmoidal to essentially hyperbolic. Additional results show that, as an activator, cholesterol is much better than all the oxysterols tested. These results suggest that ACAT1 contains two types of sterol binding sites; the structural requirement for the ACAT activator site is more stringent than it is for the ACAT substrate site. Upon activation by cholesterol, ACAT1 becomes promiscuous toward various sterols as its substrate.