Oxygenated derivatives of cholesterol (oxysterols) present a remarkably diverse profile of biological activities, including effects on sphingolipid metabolism, platelet aggregation, apoptosis, and protein prenylation. The most notable oxysterol activities center around the regulation of cholesterol homeostasis, which appears to be controlled in part by a complex series of interactions of oxysterol ligands with various receptors, such as the oxysterol binding protein, the cellular nucleic acid binding protein, the sterol regulatory element binding protein, the LXR nuclear orphan receptors, and the low-density lipoprotein receptor. Identification of the endogenous oxysterol ligands and elucidation of their enzymatic origins are topics of active investigation. Except for 24, 25-epoxysterols, most oxysterols arise from cholesterol by autoxidation or by specific microsomal or mitochondrial oxidations, usually involving cytochrome P-450 species. Oxysterols are variously metabolized to esters, bile acids, steroid hormones, cholesterol, or other sterols through pathways that may differ according to the type of cell and mode of experimentation (in vitro, in vivo, cell culture). Reliable measurements of oxysterol levels and activities are hampered by low physiological concentrations (approximately 0.01-0.1 microM plasma) relative to cholesterol (approximately 5,000 microM) and by the susceptibility of cholesterol to autoxidation, which produces artifactual oxysterols that may also have potent activities. Reports describing the occurrence and levels of oxysterols in plasma, low-density lipoproteins, various tissues, and food products include many unrealistic data resulting from inattention to autoxidation and to limitations of the analytical methodology. Because of the widespread lack of appreciation for the technical difficulties involved in oxysterol research, a rigorous evaluation of the chromatographic and spectroscopic methods used in the isolation, characterization, and quantitation of oxysterols has been included. This review comprises a detailed and critical assessment of current knowledge regarding the formation, occurrence, metabolism, regulatory properties, and other activities of oxysterols in mammalian systems.