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In former experiments we found that the extent of experimentally induced hypercholesterolemia in male Sprague-Dawley rats was significantly reduced by incorporation of 20% Scenedesmus powder in the diet. This paper reports on the localization of the activity in Scenedesmus powder following extraction of hydrophilic and lipophilic fractions. The fractions obtained by hot water treatment and chloroform-methanol extraction and the remaining extracted algae were incorporated in the standard diet in amounts corresponding to 20% Scenedesmus powder. In animals fed on the standard diet + 3% cholesterol for 6 weeks, the average concentration of blood plasma cholesterol increased from 2.0 to 3.5 mmol/l. The average cholesterol level in animals receiving the different algae extracts + 3% cholesterol amounted to between 2.1 and 2.9 mmol/l. The hot water extracted algae material held the plasma cholesterol levels in cholesterol-stressed animals at normal values. The content of plasma triglyceride in animals receiving the different fractions was lowered by 35–55% in nearly all groups. In cholesterol-stressed animals the excessive deposition of cholesterol in the liver was reduced by untreated algal powder as well as algal material extracted with water or chloroform/methanol. The decrease in liver cholesterol amounted to 50%.