Type I human hepatic 3alpha-hydroxysteroid dehydrogenase (AKR1C4) plays a significant role in bile acid biosynthesis, steroid hormone metabolism, and xenobiotic metabolism. Utilization of a hidden Markov model for predictive modeling of nuclear hormone receptor response elements coupled with chromatin immunoprecipitation/microarray technology revealed a putative binding site in the AKR1C4 promoter for the nuclear hormone receptor known as liver X receptor alpha, (LXRalpha [NR1H3]), which is the physiological receptor for oxidized cholesterol metabolites. The putative LXRalpha response element (LXRE), identified by chromatin immunoprecipitation, was approximately 1.5 kilobase pairs upstream of the transcription start site. LXRalpha was shown to bind specifically to this LXRE and mediate transcriptional activation of the AKR1C4 gene, leading to increased AKR1C4 protein expression. These data suggest that LXRalpha may modulate the bile acid biosynthetic pathway at a unique site downstream of CYP7A1 and may also modulate the metabolism of steroid hormones and certain xenobiotics.