The nuclear receptor liver X receptor [LXR] is activated by endogenous oxidized derivatives of cholesterol. It constitutes a critical receptor in the regulation of various physiological functions related to the development of metabolic and cardiovascular diseases, such as atherosclerosis and diabetes, as well as various other disorders. Both isoforms of LXR, LXRα [NR1H3] and LXRβ [NR1H2], form heterodimers with the isoforms of the retinoid X receptor [RXR], which then regulate the gene expression by binding to DNA sequences associated with target genes. LXR acts as a cholesterol sensor in response to an increased concentration of cholesterol in cells and induces the transcription of genes that protect cells from cholesterol overload. LXRs play numerous roles in controlling cholesterol homeostasis via their actions on bile acid synthesis and metabolism/excretion, reverse cholesterol transport and cholesterol absorption/excretion in the intestines. Therefore, these receptors show great potential as pharmacological targets for anti-atherosclerotic activities. Recent discoveries have also emphasized the important involvement of LXRs in the pathogenesis of diabetes, Alzheimer's disease, inflammation, adrenal steroid synthesis, skin aging and male fertility. However, LXR activation has also been shown to stimulate lipogenesis via sterol regulatory element binding protein-1c, leading to liver steatosis and hypertriglyceridemia. This review summarizes recent scientific discoveries and the biological actions of LXR with a special focus on the involvement of this type of receptor in important diseases and conditions.