Exposure of weanling rats to a diet containing the element tellurium results in specific inhibition of squalene epoxidase, an obligate enzyme in cholesterol biosynthesis. Liver responds to the resulting intracellular sterol deficit by up-regulating, in parallel and to the same extent, expression of mRNA for squalene epoxidase and for HMG-CoA reductase, the major rate-limiting enzyme in the pathway. This increased mRNA expression, coupled with additional translational and posttranslational activation of the pathway allows normal levels of cholesterol synthesis in liver despite tellurium-induced inhibition of squalene epoxidase. The response to tellurium challenge in sciatic nerve is very different. In this tissue, cholesterol synthesis is prominent because of the large amount of cholesterol required for synthesis and maintenance of myelin. Although nerve shows an initial (at 1 day) up-regulation of mRNA expression for both enzymes in response to tellurium exposure, this is followed quickly by parallel down-regulation of both enzymes, in concert with down-regulation of mRNA expression for myelin proteins. We suggest that the tellurium-induced deficit in sterols leads to a coordinate down-regulation of synthesis of myelin components. The initial early up-regulation of cholesterol biosynthesis in sciatic nerve due to the cholesterol deficit is countered by down-regulation which is coordinated with overall control of the program of myelin assembly. This tissue-specific control of cholesterol synthesis in sciatic nerve is a point of vulnerability to toxicants, and may be related to the need for coordinate synthesis of all components of myelin.