The gene encoding fatty acid synthase, the essential multi-functional enzyme of fatty acid biosynthesis, is shown to be regulated by cellular sterol levels similar to genes that encode important proteins of cholesterol metabolism. We show that expression of the endogenous FAS gene is repressed when regulatory sterols are included in the culture medium of HepG2 cells and that the FAS promoter is subject to similar regulation when fused to the luciferase reporter gene. Mutational studies demonstrate that sterol regulation is mediated by binding sites for the sterol regulatory element-binding protein (SREBP) and transcription factor Sp1, making it mechanistically similar to sterol regulation of the low density lipoprotein receptor gene. It is also demonstrated that SREBP and Sp1 synergistically activate the FAS promoter in Drosophila tissue culture cells, which lack endogenous Sp1. These experiments provide key molecular evidence that directly links the metabolism of fatty acids and cholesterol together.