Disodium ascorbyl phytostanol phosphate (FM-VP4) is a synthetic compound derived from sitostanol and campestanol that has proved to be efficient as a cholesterol-lowering therapy in mice and human subjects. However, the mechanism of action of FM-VP4 remains unknown. The present study tests the ability of FM-VP4 to alter intestinal and liver cholesterol homeostasis in mice. Female C57BL/6J mice were fed either a control chow or a 2 % FM-VP4-enriched diet for 4 weeks. FM-VP4 reduced the in vivo net intestinal cholesterol absorption and plasma and liver cholesterol concentrations by 2·2-, 1·5- and 1·6-fold, respectively, compared with control mice. Furthermore, FM-VP4 also showed an impact on bile acid homeostasis. In FM-VP4 mice, liver and intestinal bile acid content was increased by 1·3- and 2·3-fold, respectively, whereas faecal bile acid output was 3·3-fold lower. FM-VP4 also increased the intestinal absorption of orally administered [3H]taurocholic acid to small intestine in vivo. Inhibition of intestinal cholesterol absorption by FM-VP4 was not mediated via transcriptional increases in intestine liver X receptor (LXR)-α, adenosine triphosphate-binding cassette transporter (ABC)-A1, ABCG5/G8 nor to decreases in intestinal Niemann-Pick C1-like 1 (NPC1L1) expression. In contrast, FM-VP4 up-regulated liver LXRα, ABCA1, ABCG5, scavenger receptor class BI (SR-BI) and hydroxymethylglutaryl coenzyme A reductase (HMGCoA-R) gene expression, whereas it down-regulated several farnesoid X receptor (FXR)-target genes such as cytochrome P450 family 7 subfamily A polypeptide 1 (CYP7A1) and Na+/taurocholate co-transporter polypeptide (NTCP). In conclusion, FM-VP4 reduced intestinal cholesterol absorption, plasma and liver cholesterol and affected bile acid homeostasis by inducing bile acid intestinal reabsorption and changed the liver expression of genes that play an essential role in cholesterol homeostasis. This is the first phytosterol or stanol that affects bile acid metabolism and lowers plasma cholesterol levels in normocholesterolaemic mice.