Squalene epoxidase (SE) is one of the most highly regulated enzymes of the cholesterol biosynthesis pathway. Here we identify the molecular basis for SREBP-2 synergy with NF-Y as the prime regulator of SE gene transcription. As expected cholesterol markedly suppressed transcriptional activity, while SREBP-1a, -1c and -2 activated it. Knock down of SREBP-2 mRNA resulted in an 85% reduction in SE expression. Interspecies comparison of SE promoter sequences identified two conserved putative NF-Y sites that were found to be important for maximal SREBP dependent gene activation and one novel conserved sterol response element (SRE). Altogether three novel SREs were identified within a 205 bp region of the SE promoter. Each of the SREs was capable of binding SREBP-2 but mutation of all three, singly or in combination, did not completely eliminate the SREBP response. Our results demonstrate the critical dependence of this 205 bp region for sterol dependent regulation of SE and uncover a possible framework for SREBP-promoter interaction, including a potent synergy with NF-Y that may be of principal importance.