To clarify the role of the sterol regulatory element-binding protein-2 (SREBP-2), we established cell lines in which human SREBP-2(1-481) could be induced by isopropyl-beta-D-thiogalactopyranoside (IPTG). The range of IPTG-induced changes in SREBP-2(1-481) levels in '23-11' cells, one of these cell lines, was almost the same as that of sterol-induced changes in the levels of mature SREBP-2, indicating that IPTG was able to regulate the expression of SREBP-2(1-481) within the normal physiological range in this cell line. Sterols regulate the expression of the LDL receptor, HMG-CoA reductase, squalene synthase and fatty acid synthase in 23-11 cells as they also do in the parental cell line HeLa S3. IPTG increased mRNA levels of the LDL receptor and HMG-CoA reductase but not squalene synthase both in the presence or absence of excess sterols. Fatty acid synthase mRNA was increased 2 h after the IPTG addition in the absence of excess sterol (10% FBS), but was slightly increased 6 h after the IPTG addition in the presence of excess sterols. In the absence of excess sterols, both SREBP-2(1-481) and endogenous mature SREBP-2 exist in the nucleus. This suggests that an increased amount of SREBP-2 over the normal physiological range is required for the regulation of fatty acid synthase. IPTG increased both the surface binding of 125I-LDL and cholesterol biosynthesis from [14C]acetate significantly in a similar time course. In contrast, fatty acid biosynthesis from [14C]acetate was almost unchanged by IPTG during the same incubation period. These results suggest that physiological amounts of SREBP-2 play a key role in the regulation of cholesterol but not fatty acid metabolism.