The farnesoid X receptor (FXR) is a ligand-activated transcription factor and a member of the nuclear receptor superfamily. In the past six years, remarkable inroads have been made into determining the functional importance of FXR. This receptor has been shown to have crucial roles in controlling bile acid homeostasis, lipoprotein and glucose metabolism, hepatic regeneration, intestinal bacterial growth and the response to hepatotoxins. Thus, the development of FXR agonists might prove useful for the treatment of diabetes, cholesterol gallstones, and hepatic and intestinal toxicity.