Streptozotocin-induced diabetic rats were maintained on 0.5%curcumin containing diet for 8 weeks. Blood cholesterol was lowered significantly by dietary curcumin in these diabetic animals. Cholesterol decrease was exclusively from LDL-VLDL fraction. Significant decrease in blood triglyceride and phospholipids was also brought about by dietary curcumin in diabetic rats. In a parallel study, wherein diabetic animals were maintained ona high cholesterol diet, the extents of hypercholesterolemia and phospholipidemia were still higher compared to those maintained on control diet. Curcuminexhibited lowering of cholesterol and phospholipid in these animals also. Liver cholesterol, triglyceride and phospholipid contents were elevated under diabetic conditions. Dietary curcumin showed a distinct tendency to counter these changes in lipid fractions of liver. This effect of curcumin was also seen in diabetic animals maintained on high cholesterol diet. Dietary curcumin also showed significant countering of renal cholesterol and triglycerides elevated in diabetic rats. In order to understand the mechanism of hypocholesterolemic action of dietary curcumin, activities of hepatic cholesterol-7a-hydroxylase and HMG CoA reductase were measured. Hepatic cholesterol-7a-hydroxylase activity was markedly higher in curcumin fed diabetic animals suggesting a higher rate of cholesterol catabolism.