YM17E (1,3-bis[[1-cycloheptyl-3-(p-dimethylaminophenyl)ureido]methyl]ben zene dihydrochloride) was found to be a potent inhibitor of acyl-CoA:cholesterol acyltransferase (ACAT) in rabbit liver and intestine microsomes. Dixon plot analysis revealed that YM17E inhibited microsomal ACAT in a non-competitive manner. YM17E induced a marked decrease in serum cholesterol, especially in non-high-density lipoprotein (HDL) fractions, in cholesterol-fed rats and rats fed normal chow. Measurement of bile secretion after oral administration of YM17E in cholesterol-fed rats showed that the drug markedly accelerated the secretion of bile acids and neutral sterols. Furthermore, absorption of [3H]cholesterol from the gut of cholesterol-fed rats was significantly inhibited by YM17E. From these results, the hypocholesterolemic activity of YM17E in these animals resulted from both a decrease in cholesterol absorption from the gut and the stimulation of excretion of cholesterol from the liver into bile. However, YM17E caused secretory diarrhea in beagle dogs at near lipid lowering doses. When YM17E was administered at the same total dosage but divided into 5 daily administrations, the incidence of diarrhea was significantly reduced while its cholesterol lowering effect became stronger. These results suggest that the inhibition of intestinal and/or liver ACAT increases the risk of diarrhea development which, however, can be avoided by controlled drug administration in beagle dogs.