The liver plays a central role in regulating cholesterol homeostasis. High fat diets have been shown to induce obesity and hyperlipidemia. Despite considerable advances in our understanding of cholesterol metabolism, the regulation of liver cholesterol biosynthesis in response to high fat diet feeding has not been fully addressed. The aim of the present study was to investigate mechanisms by which a high fat diet caused activation of liver 3-hydroxy-3-methylglutaryl coenzyme A reductase (HMG-CoA reductase) leading to increased cholesterol biosynthesis. Mice were fed a high fat diet (60% kcal fat) for 5weeks. High fat diet feeding induced weight gain and elevated lipid levels (total cholesterol and triglyceride) in both the liver and serum. Despite cholesterol accumulation in the liver, there was a significant increase in hepatic HMG-CoA reductase mRNA and protein expression as well as enzyme activity. The DNA binding activity of sterol regulatory element binding protein (SREBP)-2 and specific protein 1 (Sp1) were also increased in the liver of mice fed a high fat diet. To validate the in vivo findings, HepG2 cells were treated with palmitic acid. Such a treatment activated SREBP-2 as well as increased the mRNA and enzyme activity of HMG-CoA reductase leading to intracellular cholesterol accumulation. Inhibition of Sp1 by siRNA transfection abolished palmitic acid-induced SREBP-2 and HMG-CoA reductase mRNA expression. These results suggest that Sp1-mediated SREBP-2 activation contributes to high fat diet induced HMG-CoA reductase activation and increased cholesterol biosynthesis. This may play a role in liver cholesterol accumulation and hypercholesterolemia.