Follow-up investigations were undertaken on a previously reported patient who had severe familial giant cell hepatitis in infancy associated with substantially increased urinary excretion of bile alcohol glucuronides. By the age of 11 years, he had developed a profile of cholanoids in plasma and urine that closely resembled the pattern seen in cerebrotendinous xanthomatosis (CTX). Sequencing of the sterol 27-hydroxylase gene (CYP27A) showed that he was homozygous for a deletion (525/526delG) that causes a frameshift and a premature stop codon. This genotype has previously been described in an adult female with classical symptoms of CTX (tendon xanthomata, cataracts and deteriorating cognitive function). A review of past medical histories of a group of patients with CTX revealed that prolonged neonatal cholestatic jaundice was common. The family histories also revealed fetal and neonatal deaths among siblings of patients with CTX. We conclude that defective activity of cholesterol 27-hydroxylase can lead to neonatal cholestatic jaundice ('hepatitis of infancy'), which may be self-limiting. After a latent period, however, progressive accumulation of cholesterol and cholestanol can lead to the xanthomata, neurodegeneration, cataracts and atherosclerosis that are typical of CTX.