In human liver, unconjugated bile acids can be formed by the action of bile acid-CoA thioesterases (BACTEs), whereas bile acid conjugation with taurine or glycine (amidation) is catalyzed by bile acid-CoA:amino acid N-acyltransferases (BACATs). Both pathways exist in peroxisomes and cytosol. Bile acid amidation facilitates biliary excretion, whereas the accumulation of unconjugated bile acids may become hepatotoxic. We hypothesized that the formation of unconjugated and conjugated bile acids from their common substrate bile acid-CoA thioesters by BACTE and BACAT is regulated via the peroxisome proliferator-activated receptor alpha (PPARalpha). Livers from wild-type and PPARalpha-null mice either untreated or treated with the PPARalpha activator WY-14,643 were analyzed for BACTE and BACAT expression. The total liver capacity of taurochenodeoxycholate and taurocholate formation was decreased in WY-14,643-treated wild-type mice by 60% and 40%, respectively, but not in PPARalpha-null mice. Suppression of the peroxisomal BACAT activity was responsible for the decrease in liver capacity, whereas cytosolic BACAT activity was essentially unchanged by the treatment. In both cytosol and peroxisomes, the BACTE activities and protein levels were upregulated 5- to 10-fold by the treatment. These effects caused by WY-14,643 treatment were abolished in PPARalpha-null mice. The results from this study suggest that an increased formation of unconjugated bile acids occurs during PPARalpha activation.