The effect of taurine on the serum and liver cholesterol and triglyceride levels was studied in rats fed cholesterol plus cholic acid. Four groups of 4 weeks old rats were fed control diet, hypercholesterolemic diet (HCD), HCD + 1% taurine or HCD + 2% taurine for 8 weeks. Addition of taurine in HCD diet showed a significant reduction not only in serum total cholesterol and triglyceride levels but also in liver total cholesterol, lipid and triglyceride contents compared to the animals fed HCD alone. Histological examination of organs of these animals showed severe fatty vacuolation in livers and signet ring type vacuolation in kidneys of rats fed HCD. Taurine showed ameliorating effect on these abnormalities. The animals fed taurine in HCD also showed increased bile and sterol excretion in faeces compared to rats fed HCD alone. Taurine showed significant hypocholesterolemia in rats probably by enhancing the catabolism of cholesterol and reducing the absorption of dietary cholesterol.