The effect of Hatakeshimeji (Lyophyllum decastes Sing.) mushroom on serum lipid levels was investigated in rats. When the mushroom (fruit body) powder or its hotwater extract was added at a level of 10% to a cholesterol-containing diet, the serum total cholesterol levels of rats fed the fruit body or the hot-water extract were markedly lower than that of controls, though there was no significant difference in serum HDL-cholesterol among the three groups. On a cholesterol-free diet, the addition of fruit body powder at a level of 5% significantly decreased serum total cholesterol. Serum triglycerides and phospholipids were significantly decreased in both the fruit body and hot-water extract groups. Furthermore, Hatakeshimeji in the diet significantly increased the activity of cholesterol 7a-hydroxylase, which converts cellular cholesterol to bile acids, as well as the fecal excretion of bile acids.