Soybean protein was exhaustively digested with endo- and exo-type microbial proteases and the effect of the digestible low molecular fraction (LMF) and the undigested high molecular fraction (HMF) on the serum cholesterol level was compared to that of the intact protein in rats given a cholesterol-enriched diet. The HMF, peptides relatively abundant in hydrophobic amino acids, was found to be substantially hypocholesterolemic when fed at the nitrogen level equivalent to that of the 20% soybean protein diet, and not only serum but also liver cholesterol levels were similar to those usually encountered in rats given diets free of cholesterol. There was a dose-dependent reduction of serum and liver cholesterol when casein was replaced stepwise with HMF. The cholesterol-lowering action could be attributable to an increased fecal steroid excretion.