The present study was carried out to develop cholesterol-reduced and gamma linolenic acid (GLA)-added butter and to examine the changes in chemical and sensory properties, and cholesterol lowering effect of GLA addition. The cholesterol removal rate reached 93.2% by β-cyclodextrin in butter before GLA addition. The thiobarbituric acid value of cholesterol-reduced and GLA-added butter increased slowly up to 4 week and plauteaued thereafter. TBA value was significantly increased with 2% GLA addition, compared with no GLA addition. The production of short-chain free fatty acids (FFA) increased with storage in all treatments. From 4 weeks storage, the amount of short-chain FFA in 2% GLA-added group was significantly higher than those in other groups. Among sensory characteristics, color, greasiness and overall acceptability were mostly affected by GLA addition, however, the rancidity value of 2% GLA addition was significantly different from those of control and GLA-unadded and cholesterol-reduced butter at 0, 6 and 8 week storage. Among groups, no difference was found in texture in all storage periods. The smallest increase of total blood cholesterol in rats was found in the group fed 2% GLA-added and cholesterol-reduced butter for 8 week, compared with that in controls. The present results showed the possibility of cholesterol-reduced and GLA-added butter development without much difference in chemical, rheological and sensory properties, and indicated a slow increase effect on blood total cholesterol in rats.