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1. When the novel hypolipidaemic compound 1-(4-carboxyphenoxy)-10-(4-chlorophenoxy) decane (CCD) was administered orally (250 mg/kg body weight for seven days) to rats, a lipophilic cholesterol-containing metabolite accumulated in the liver. 2. Analysis by n.m.r. spectroscopy and mass spectrometry identified the metabolite as the cholesterol conjugate of CCD. This structure was confirmed by comparison with reference material synthesized in our laboratories. 3. The xenobiotic cholesteryl ester was not further metabolized and, unlike the natural counterparts, was not transported by lipoproteins. 4. When added in vitro, the xenobiotic cholesteryl ester appeared to enhance the activity of hepatic lysosomal cholesteryl ester hydrolase and thus may contribute to the hypocholesterolaemic activity of CCD.