The hepatic predominating cytochrome P450, CYP3A4, plays an essential role in the detoxification of bile acids and is important in pathological conditions such as cholestasis where CYP3A4 is adaptively up-regulated. However, the mechanism that triggers the up-regulation of CYP3A4 is still not clear. In this study, using recombinant CYP3A4 and human liver microsomes, we demonstrate that CYP3A4 can metabolise lithocholic acid into 3-dehydrolithocholic acid, a potent activator of the nuclear receptors, pregnane X receptor and 1,25-dihydroxy vitamin D3 receptor, which are known to regulate the expression of CYP3A4. This process thus provides a feed-forward metabolism of toxic bile acid that may be of importance in maintaining bile acid homeostasis. We also provide evidence for a novel CYP3A4-mediated metabolic pathway of the secondary bile acid deoxycholic acid. Patients treated with the antiepileptic drug carbamazepine, a CYP3A4 inducer, had markedly elevated urinary excretion of 1beta-hydroxydeoxycholic acid compared to healthy controls. The importance of CYP3A4 in this process was verified by incubations with recombinant CYP3A4 and human liver microsomes, both of which efficiently converted deoxycholic acid into 1beta-hydroxydeoxycholic acid. Interestingly, CYP3A4 was also found to be active against the secondary bile acid ursodeoxycholic acid.