LXR is a nuclear transcription factor activated by oxysterol ligands (reflecting high cholesterol levels), which integrates the metabolism of fatty acids, sterols, and glucose. LXRα is expressed primarily in liver, adipose tissue, and macrophages; LXRβ is present in all tissues.

When bound to an oxysterol ligand, LXRs form heterodimers with a second type of nuclear receptor, the retinoid X receptors (RXR), and the LXR-RXR dimer activates transcription from a set of genes, including those for acetyl-CoA carboxylase, the first enzyme in fatty acid synthesis; fatty acid synthase; the cytochrome P-450 enzyme CYP7A1, required for sterol conversion to bile acids; apoproteins that participate in cholesterol transport (apoC-I, apoC-II, apoD, and apoE); the ATP-binding cassette (ABC) transporters ABCA1 and ABCG1, required for reverse cholesterol transport (see below); GLUT4, the insulin-stimulated glucose transporter of muscle and adipose tissue; and an SREBP called SREBP1

The transcriptional regulators LXR and SREBP therefore work together to achieve and maintain cholesterol homeostasis; SREBPs are activated by low levels of cellular cholesterol, and LXRs are activated by high cholesterol levels.

Regulation by LXRs is complemented by the activity of farnesoid X receptor (FXR), which also forms a heterodimer with RXR, with an effect that is often reciprocal to that of LXR-RXR. Although farnesol is a ligand for this receptor, FXR responds primarily to bile acids. High levels of bile acids can be toxic. FXR, expressed mainly in the intestine, liver, kidney, and adrenal glands, provides essential control of bile acid levels by increasing or decreasing expression of multiple genes.