Soy intake reduces cholesterol levels. However, both the identity of the soy component or components that contribute to this reduction and the cellular mechanism producing this reduction are unknown. Soy consists of protein, lipids, fiber, and phytochemicals including isoflavones. We propose that the isoflavone component of soy mediates this effect, at least in part, by affecting cellular sterol homeostasis. We investigated the effects of an isoflavone-containing soy extract and the individual isoflavones on the maturation of the sterol regulatory element binding proteins (SREBP) and the expression of SRE-regulated genes controlling lipid metabolism. We found a corresponding increase in the mature form of SREBP-2 in both soy extract- and isoflavone-treated HepG2 cells, whereas there was no significant change in the levels of SREBP-1. 3-Hydroxy-3-methylglutaryl coenzyme A (HMG CoA) reductase protein and HMG CoA synthase mRNA levels also increased. When HepG2 cells were transiently transfected with HMG CoA synthase and LDL receptor reporter plasmids there was an increase in expression in response to soy extract or isoflavone treatment from both of these promoters, but this induction was blunted in the presence of sterols (P < 0.05). The mechanism responsible for this effect may be via a statin-like inhibition of HMG CoA reductase enzyme activity or by enhanced SREBP processing via the SREBP cleavage activating protein. We hypothesize that maturation of SREBP and induction of SRE-regulated genes produce an increase in surface LDL receptor expression that increases the clearance of plasma cholesterol, thus decreasing plasma cholesterol levels.