The peroxisomal ATP binding cassette (ABC) transporter adrenoleukodystrophy-related protein, encoded by ABCD2, displays functional redundancy with the X-linked adrenoleukodystrophy-associated protein, making ABCD2 up-regulation of therapeutic value. Cholesterol lowering activates human ABCD2 in cultured cells. To investigate in vivo regulation by sterols, we first characterized a sterol regulatory element (SRE) in the murine Abcd2 promoter that is directly bound by SRE-binding proteins (SREBPs). Intriguingly, this element overlaps with a direct repeat 4, which serves as binding site for liver X receptor (LXR)/retinoid X receptor heterodimers, suggesting novel cross-talk between SREBP and LXR/retinoid X receptor in gene regulation. Using fasting-refeeding and cholesterol loading, SREBP accessibility to the SRE/direct repeat 4 was tested. Results suggest that adipose Abcd2 is induced by SREBP1c, whereas hepatic Abcd2 expression is down-regulated by concurrent activation of LXRalpha and SREBP1c. In cell culture, SREBP1c-mediated Abcd2 induction is counteracted by ligand-activated LXRalpha. Finally, hepatic Abcd2 expression in LXRalpha,beta-deficient mice is inducible to levels vastly exceeding wild type. Together, we identify LXRalpha as negative modulator of Abcd2, acting through a novel regulatory mechanism involving overlapping SREBP and LXRalpha binding sites.