Stimulation of steroid-producing cells of the gonads and adrenals with tropic hormone results in a marked increase in steroid hormone synthesis within minutes. The rate-limiting step in this acute steroidogenic response is the transport of cholesterol from the outer to the inner mitochondrial membrane, where the first committed step in steroid synthesis is performed by the side-chain cleavage enzyme system. This process of cholesterol translocation is blocked by inhibitors of protein synthesis, suggesting that the effect of trophic hormones, acting through the intermediacy of cAMP, most likely involves the de novo synthesis of a protein that is rapidly inactivated. The recently identified steroidogenic acute regulatory (StAR) protein appears to be the most likely candidate for the" labile" protein, based on the following observations: 1) Expression of StAR in COS-1 cells engineered to contain the cholesterol side-chain cleavage system substantially augments pregnenolone formation; 2) StAR protein is expressed almost exclusively in steroid-producing cells, except the trophoblast of the human placenta, and its presence is correlated with steroid hormone production; 3) StAR mRNA increases in response to cAMP; 4) StAR is a target for serine phosphorylation mediated by protein kinase A, a process that is essential for maximizing StAR activity; and 5) lack of functional StAR causes the autosomal recessive disease, congenital lipoid adrenal hyperplasia, characterized by markedly impaired gonadal and adrenal steroid hormone synthesis. Studies on the mechanism of action of StAR revealed that import into mitochondria is not essential to its steroidogenesis-enhancing activity and more likely represents a means of rapidly inactivating StAR. Truncation mutations and site-directed mutations established that the C-terminus of the StAR protein contains the functionally important domains. The demonstration of steroidogenic activity of recombinant StAR protein on isolated mitochondria from bovine corpus luteum using protein that lacks the mitochondrial targeting sequence confirmed that StAR import is not essential for its steroidogenic activity and suggested that StAR acts directly on the outer mitochondrial membrane in the absence of intermediary cytosolic factors. Evidence that StAR functions as a cholesterol transfer protein raises the possibility that StAR acts directly on lipids of the outer mitochondrial membrane, probably stimulating cholesterol desorption from the sterol-rich outer membrane and its movement to the relatively sterol-poor inner membrane.