The liver-enriched transcription factor DBP is expressed with a stringent circadian rhythm. We present evidence that DBP is a regulator of the circadian expression of the rat gene encoding cholesterol 7α hydroxylase (C7αH), the rate-limiting enzyme in the conversion of cholesterol to bile acids. As with DBP, C7αH mRNA reaches peak levels in the evening, and its cycling is independent of daily food and light cues. As predicted for a DBP target gene, the primary level of C7αH circadian expression is at the transcriptional level. DBP can activate the C7αH promoter in cotransfection assays through a cognate DNA site centered around -225. In nuclear extracts prepared by a novel method that, in contrast to conventional techniques, yields near-quantitative recovery of DBP and other non-histone proteins, the DNA site required for DBP activation is the predominant site of occupancy by nuclear factors on the C7αH promoter. At this site, the predominant binding activity is an evening-specific complex of which DBP is a component. These data suggest that DBP may play an important role in cholesterol homeostasis through circadian transcriptional regulation of cholesterol 7α hydroxylase.