The present study was performed to elucidate the hypocholesterolemic action of chitosan on the diet-induced hypercholesterolemia in rats. Male Sprague-Dawley rats (n=24) were fed with chitosan-free diet (Control), diets containing 2% or 5% chitosan for 4 weeks. Hypercholesterolemia was induced by adding 1% cholesterol and 0.5% cholic acid to all diets. Body weight gain and food intake of rats did not differ among the groups. The chitosan treated groups showed significant improvement in the plasma concentration of total cholesterol and LDL-cholesterol compared to the control group (p<0.05). Also, the chitosan treated groups decreased the liver concentration of total lipid and total cholesterol compared to the control group (p<0.05). The activity of hepatic cholesterol $7{alpha}-hydroxylase$ (CYP7A1), the rate-limiting enzyme in the conversion of cholesterol to bile acids, was increased by 123% and 165% for the 2% or 5% chitosan diets, respectively. These findings suggest that enhancement of hepatic CYP7A1 activity may be a mechanism, which can partially account for the hypocholesterolemic effect of dietary chitosan in cholesterol metabolism.