Recent studies reveal that bile acids are signalling molecules that activate several nuclear receptors and regulate many physiological pathways and processes to maintain bile acid and cholesterol homeostasis. Analysis of orphan receptor expression patterns in enterohepatic tissues identified bile acids as ligands for farnesoid X receptor (FXR). The primary bile acid chenodeoxycholic acid (CDCA) was shown to be the most potent FXR ligand in vitro at an EC50 of 10-50 microM. FXR can also be activated by the secondary bile acids lithocholic acid (LCA) and deoxycholic acid (DCA). Upon activation FXR heterodimerises with 9-cis retinoic X receptor (RXR) and regulates a cohort of genes involved in cholesterol catabolism and bile acids biosynthesis. Thus bile acid-activated FXR directly induces expression of Small Heterodimer Partner (SHP), a nuclear receptor that suppresses bile acid biosynthesis down-regulates the Na+ taurocholate cotransport peptide (NTCP), a pump depicted to transport bile acids from the lumen into hepatocyte, and induces expression of bile salt export pump (BSEP), the principal bile acid efflux transporter in the liver. As demonstrated by the Fxr null mice, FXR defends the liver against cholestasis. The 6-ethyl derivative of CDCA (6-ECDCA) is approximately 100 fold more potent than CDCA in activating FXR in vitro. In vivo administration of 6-ECDCA protects against cholestasis induced by estrogen and LCA in rats providing evidence that development of potent FXR agonists might represent a new approach for the treatment of cholestastic disorders.