Aphidicolin, a fungal metabolite which is a specific inhibitor of DNA polymerase alpha, inhibited the incorporation of [14C]acetate into desmosterol in mouse L cells by 50% at a concentration of 8.8 microM. It had no effect on acetate metabolism into fatty acids or CO2. The site of inhibition was determined to be distal to the formation of mevalonic acid since aphidicolin also inhibited the incorporation of [14C]mevalonolactone into desmosterol but had no effect on the activity of 3-hydroxy-3-methylglutaryl-CoA reductase (EC 1.1.1.34) or the incorporation of [14C]acetate into total nonsaponifiable lipids. High pressure liquid chromotographic analysis of the distribution of radioactivity among the nonsaponifiable lipids formed from [14C]acetate in the presence of aphidicolin indicated an accumulation of lanosterol accompanied by a proportional decrease in radiolabeled desmosterol and two of its precursors, delta 5,7,24-cholestatrienol, and 4 alpha-methyl-delta 8,24-cholestadienol. In cells exposed to aphidicolin, lanosterol accumulation was rapid (15 min) and reversible after a 3-h exposure when cells were rinsed and fresh medium added. It was concluded that aphidicolin inhibits the conversion of lanosterol to C-27 sterols. Although the exact mechanism of this inhibition has not yet been determined, addition of aphidicolin to 20,000 X g supernatant fractions of mouse liver homogenates inhibited the incorporation of [14C]mevalonolactone into cholesterol in a concentration-dependent manner, suggesting that aphidicolin may act directly on one or more of the enzymatic steps involved in lanosterol demethylation. The ubiquitous occurrence of an aphidicolin binding site on eukaryotic DNA alpha polymerases and the inhibitory action of aphidicolin at a proposed secondary regulatory site in sterol biosynthesis (lanosterol metabolism) suggest that a naturally occurring compound may exist which can regulate both DNA replication and cholesterogenesis.