Prebiotic fibres have been proposed to promote weight loss and lower serum cholesterol; however, the mechanisms are not fully understood. The aim of the present research was to identify possible mechanisms through which prebiotic fibres improve serum lipids. Lean and obese JCR:La-cp rats aged 8 weeks consumed one of three diets supplemented with 0, 10 or 20 % prebiotic fibre for 10 weeks. Rats were anaesthetised and a fasting blood sample was taken for lipid analysis. Real-time PCR was used to determine gene expression for cholesterol and fatty acid regulatory genes in liver tissue. Liver and caecal digesta cholesterol and TAG content were quantified. Both doses of prebiotic fibre lowered serum cholesterol levels by 24 % in the obese hyperlipidaemic rats (P < 0.05). This change was associated with an increase in caecal digesta as well as an up-regulation of genes involved in cholesterol synthesis and bile production. Additionally, there was a 42 % reduction in TAG accumulation in the liver of the obese rats with 10 % prebiotic diet (P < 0.05); however, no change in liver fatty acid synthase (FAS). Prebiotic fibres appear to lower cholesterol levels through increased cholesterol excretion in the form of bile and inhibit the accumulation of TAG in the liver through a mechanism unrelated to FAS. These effects appear to be limited to the obese model and particularly the 10 % dose. The present work is significant as it provides insight into the mechanisms of action for prebiotic fibres on lipid metabolism and furthers the development of dietary treatments for hypercholesterolaemia.