The farnesoid X-activated receptor (FXR; NR1H4), a member of the nuclear hormone receptor superfamily, induces gene expression in response to several bile acids, including chenodeoxycholic acid. Here we used suppression subtractive hybridization to identify apolipoprotein C-II (apoC-II) as an FXR target gene. Retroviral expression of FXR in HepG2 cells results in induction of the mRNA encoding apoC-II in response to several FXR ligands. EMSAs demonstrate that recombinant FXR and RXR bind to two FXR response elements that are contained within two important distal enhancer elements (hepatic control regions) that lie 11 kb and 22 kb upstream of the transcription start site of the apoC-II gene. A luciferase reporter gene containing the hepatic control region or two copies of the wild-type FXR response element was activated when FXR-containing cells were treated with FXR ligands. In addition, we report that hepatic expression of both apoC-II and phospholipid transfer protein mRNAs increases when mice are fed diets supplemented with cholic acid, an FXR ligand, and this induction is attenuated in FXR null mice. Finally, we observed decreased plasma triglyceride levels in mice fed cholic acid- containing diets. These results identify a mechanism whereby FXR and its ligands lower plasma triglyceride levels. These findings may have important implications in the clinical management of hyperlipidemias.