Neutral cholesterol ester hydrolase is a key enzyme in regulating hepatic free cholesterol. Using the CEH specific cDNA sequence in the 5′-untranslated region as a primer, we amplified and cloned 1.3 Kb of promoter sequence upstream of the ATG initiation codon. Analysis of the sequence revealed the presence of a consensus GC-box, which can bind the positive transcription factor Sp1, 35 bases upstream from the transcription start site. Transcriptional regulation by agents perturbing cholesterol metabolism was studied in HepG2 cells by transient transfection assays of the promoter activity in deletion constructs linked to the luciferase reporter gene. Three functional sterol response sequences were identified at positions -92, -160, and -280 of the CEH promoter. The sterol response sequence at position -92 was shown to bind SREBP-2. Therefore, the CEH gene is similar to other genes involved in regulation of cholesterol homeostasis, in that it appears to be transcriptionally regulated by sterols.