Biphenyl derivatives represented by the following formula (1): wherein R1 represents a C5-7 alkyl group, R2 represents a substituted or unsubstituted aromatic hydrocarbon, or cycloalkyl group, R3 represents a tetrazolyl group, —NHCOCF3, —NHSO2CF3 or —SO2NHCONHR4 in which R4 represents a substituted or unsubstituted aromatic hydrocarbon group, and Z represents a single bond, a C1-4 alkylene group or —SO2NH—, and salts thereof; and ACAT inhibitors and medicines containing them as active ingredients. The compounds according to the present invention possess excellent ACAT inhibitory activities, and are useful as preventives and/or therapeutics for diseases cased by the enhancement of ACAT activity, for example, hypercholesterolemia, atherosclerosis and the like.