The present study examined the cholesterol-lowering activity of algal powder (AP), algal lipids (AL), and algal residue (AR) and their interaction with genes of transporters, receptors, and enzymes involved in cholesterol absorption and metabolism. In this experiment, 48 hamsters were fed either control diet or one of the three experimental diets containing 2% AP, 1.0% AL, or 1.0% AR for 6 weeks. Plasma total cholesterol (TC) and non-high-density-lipoprotein-cholesterol (non-HDL-C) were significantly decreased in the AP and AL groups but not in the AR group compared with those in the control hamsters. It was found that the cholesterol-lowering activity of AP and AL was associated with down-regulation of hepatic 3-hydroxy-3-methylglutaryl-CoA (HMG-CoA) reductase, low-density lipoprotein receptor (LDLR), and intestinal Niemann-Pick C1-like 1 (NPC1L1) transporter. It was concluded that the alga possessed the cholesterol-lowering activity and its lipids were the active ingredients. The mechanisms underlying the cholesterol-lowering activity of algae were mediated most likely by increasing the sterol excretion and decreasing the cholesterol absorption and synthesis.