The synthesis and uptake of cholesterol requires transcription factors designated sterol regulatory element-binding proteins (SREBPs). SREBPs are bound to membranes in a hairpin orientation with their transcriptionally active NH 2 -terminal segments facing the cytosol. The NH 2 -terminal segments are released from membranes by two-step proteolysis initiated by site 1 protease (S1P), which cleaves in the luminal loop between two membrane-spanning segments. Next, site 2 protease (S2P) releases the NH 2 -terminal fragment of SREBP. The S2P gene was recently isolated by complementation cloning using Chinese hamster ovary cells that require cholesterol for growth, due to a mutation in the S2P gene. A similar approach cannot be used for S1P because all previous cholesterol auxotrophs manifest defects in S2P, which is encoded by a single copy gene. To circumvent this problem, in the current studies we transfected Chinese hamster ovary cells with the S2P cDNA, assuring multiple copies. We mutagenized the cells, selected for cholesterol auxotrophy, and identified two mutant cell lines (SRD-12A and -12B) that fail to cleave SREBPs at site 1. Complementation analysis demonstrated that the defects in both cell lines are recessive and noncomplementing, indicating a mutation in the same gene. These cells should now be useful for expression cloning of the sterol-regulated S1P gene.Studies in tissue culture cells have defined a feedback regulatory system that controls the synthesis and uptake of cholesterol and fatty acids. The central agents are membrane-bound transcription factors designated as sterol regulatory elementbinding proteins (SREBPs) 1 (reviewed in Ref. 1). These proteins, which average 1,150 amino acids in length, consist of three segments. The NH 2 -terminal segment of ϳ480 amino acids is a transcription factor of the basic-helix-loop-helixleucine zipper family. This is followed by a membrane attachment segment consisting of two membrane-spanning sequences separated by a 31-amino acid hydrophilic loop that projects into the lumen of the endoplasmic reticulum and nuclear envelope. The COOH-terminal segment of ϳ580 amino acids performs a regulatory role. The SREBPs are inserted into the membranes of the endoplasmic reticulum and nuclear envelope in a hairpin fashion with the NH 2 -terminal and COOH-terminal segments projecting into the cytosol (2).In sterol-depleted cells, a two-step proteolytic process releases the NH 2 -terminal segments (designated nSREBPs) from the membranes, allowing them to enter the nucleus, where they stimulate transcription of multiple genes encoding enzymes of cholesterol synthesis, including HMG-CoA synthase, HMG-CoA reductase, farnesyl diphosphate synthase, squalene synthase, and others (1, 3-6). The nSREBPs also enhance transcription of genes encoding enzymes of fatty acid and triglyceride biosynthesis (acetyl-CoA carboxylase, fatty acid synthase, stearoyl-CoA desaturase-1 and -2, glycerol-3-phosphate acyltransferase) (5-10) and for the low density lipoprotein (LDL) receptor (1, 6). ...