The objective of this article is to review existing studies concerning the effects of probiotics and prebiotics on serum cholesterol concentrations, with particular attention on the possible mechanisms of their action. Although not without exception, results from animal and human studies suggest a moderate cholesterol-lowering action of dairy products fermented with appropriate strain(s) of lactic acid bacteria and bifidobacteria. Mechanistically, probiotic bacteria ferment food-derived indigestible carbohydrates to produce short-chain fatty acids in the gut, which can then cause a decrease in the systemic levels of blood lipids by inhibiting hepatic cholesterol synthesis and/or redistributing cholesterol from plasma to the liver. Furthermore, some bacteria may interfere with cholesterol absorption from the gut by deconjugating bile salts and therefore affecting the metabolism of cholesterol, or by directly assimilating cholesterol. For prebiotic substances, the majority of studies have been done with the fructooligosaccharides inulin and oligofructose, and although convincing lipid-lowering effects have been observed in animals, high dose levels had to be used. Reports in humans are few in number. In studies conducted in normal-lipidemic subjects, two reported no effect of inulin or oligofructose on serum lipids, whereas two others reported a significant reduction in serum triglycerides (19 and 27%, respectively) with more modest changes in serum total and LDL cholesterol. At present, data suggest that in hyperlipidemic subjects, any effects that do occur result primarily in reductions in cholesterol, whereas in normal lipidemic subjects, effects on serum triglycerides are the dominant feature.