Squalestatin 1 is a member of a novel family of fermentation products isolated from a previously unknown Phoma species (Coelomycetes). Squalestatin 1 is a potent, selective inhibitor of squalene synthase, a key enzyme in cholesterol biosynthesis; in vitro, 50% inhibition of enzyme activity is observed at a concentration of 12 +/- 5 nM (range of 4-22 nM). Squalestatin 1 inhibits cholesterol biosynthesis from [14C]acetate by isolated rat hepatocytes (50% inhibition at 39 nM) and by rat liver in vivo. In marmosets, a species with a lipoprotein profile similar to that of man, squalestatin 1 lowers serum cholesterol by up to 75%. This compound will allow further investigation of the control of the sterol biosynthesis pathway and could also lead to the development of new therapies for elevated serum cholesterol.