Acyl-CoA:cholesterol acyltransferase 2 (ACAT2) generates cholesterol esters (CE) for packaging into newly synthesized lipoproteins and thus is a major determinant of blood cholesterol levels. ACAT2 is expressed exclusively in the small intestine and liver, but the relative contributions of ACAT2 expression in these tissues to systemic cholesterol metabolism is unknown. We investigated whether CE derived from the intestine or liver would differentially affect hepatic and plasma cholesterol homeostasis. We generated liver-specific (ACAT2(L-/L-)) and intestine-specific (ACAT2(SI-/SI-)) ACAT2 knockout mice and studied dietary cholesterol-induced hepatic lipid accumulation and hypercholesterolemia. ACAT2(SI-/SI-) mice, in contrast to ACAT2(L-/L-) mice, had blunted cholesterol absorption. However, specific deletion of ACAT2 in the intestine generated essentially a phenocopy of the conditional knockout of ACAT2 in the liver, with reduced levels of plasma very low-density lipoprotein and hepatic CE, yet hepatic-free cholesterol does not build up after high cholesterol intake. ACAT2(L-/L-) and ACAT2(SI-/SI-) mice were equally protected from diet-induced hepatic CE accumulation and hypercholesterolemia. These results suggest that inhibition of intestinal or hepatic ACAT2 improves atherogenic hyperlipidemia and limits hepatic CE accumulation in mice and that depletion of intestinal ACAT2 is sufficient for most of the beneficial effects on cholesterol metabolism. Inhibitors of ACAT2 targeting either tissue likely would be beneficial for atheroprotection.