To induce dietary atherosclerosis in mice, high‐fat/high‐cholesterol (HF) diets are frequently supplemented with cholic acid (CA). This diet produces low plasma levels of high‐density lipoprotein (HDL) and high levels of low‐density lipoprotein (LDL). However, HF diets without any added CA, which more closely resemble human diets, increase levels of both HDL and LDL, suggesting that CA may be responsible for the lowering of HDL. Our aim was to examine the potential mechanism responsible for the lowering of HDL. Nontransgenic (NTg) C57BL mice and apoA‐I‐transgenic (apoAI‐Tg) mice, with greatly increased basal apoA‐I and HDL levels, were used. Mice were fed the following four diets: control (C), high‐fat/high‐cholesterol (HF), control and 1% cholate (CA) and HF + CA. Dietary CA reduced plasma HDL levels by 35% in NTg and 250% in apoAI‐Tg mice, independent of the fat or cholesterol content of the diet. Hepatic apoA‐I mRNA decreased 30% in NTg and 180% in apoAI‐Tg mice. Hepatic apoA‐I synthesis and apoA‐I mRNA transcription rates also decreased in parallel with apoA‐I mRNA levels, suggesting that the CA‐induced decreases in plasma apoA‐I levels occurred primarily via decreasing apoA‐I mRNA transcription rates. An HF diet increased HDL levels 1.8‐fold in NTg and 1.5‐fold in apoAI‐Tg mice. Addition of CA to the HF diet lowered HDL levels by 1.6‐fold in NTg and 2.5‐fold in apoAI‐Tg mice. Transfection studies with the apoA‐I promoter suggested the presence of a putative cis‐acting element responsible for the CA‐mediated down‐regulation of the apoA‐I promoter activity. Measurements of apoA‐I regulatory protein‐1 (ARP‐1) mRNA, a negative regulator of the apoA‐I gene in the mouse liver showed that CA increased the ARP‐1 mRNA levels. Because apoA‐I gene transcription alone was not sufficient to account for the lowering of plasma HDL levels, scavenger receptor‐B1 (SR‐B1) and hepatic lipase (HL) mRNAs levels were quantitated. The levels of SR‐B1 and HL mRNA were not changed by dietary CA. These studies suggest that dietary cholate regulates plasma levels of apoA‐I primarily by a transcriptional mechanism via a putative bile acid response element involving a negative regulator of apoA‐I, and partly by an unidentified post‐transcriptional mechanism.