Steroidogenic factor 1 (SF-1), an orphan member of the intracellular receptor superfamily, plays an essential role in the development and function of multiple endocrine organs. It is expressed in all steroidogenic tissues where it regulates the P450 steroidogenic genes to generate physiologically active steroids. Although many of the functions of SF-1 in vivo have been defined, an unresolved question is whether a ligand modulates its transcriptional activity. Here, we show that 25-, 26-, or 27-hydroxycholesterol, known suppressors of cholesterol biosynthesis, enhance SF-1-dependent transcriptional activity. This activation is dependent upon the SF-1 activation function domain, and, is specific for SF-1 as several other receptors do not respond to these molecules. The oxysterols activate at concentrations comparable to those previously shown to inhibit cholesterol biosynthesis, and, can be derived from cholesterol by P450c27, an enzyme expressed within steroidogenic tissues. Recent studies have shown that the nuclear receptor LXR also is activated by oxysterols. We demonstrate that different oxysterols differ in their rank order potency for these two receptors, with 25-hydroxycholesterol preferentially activating SF-1 and 22(R)-hydroxycholesterol preferentially activating LXR. These results suggest that specific oxysterols may mediate transcriptional activation via different intracellular receptors. Finally, ligand-dependent transactivation of SF-1 by oxysterols may play an important role in enhancing steroidogenesis in vivo.