We studied the mechanisms of hypolipidemic effects of NIP-200 (3,5-dimethyl-4,6-diphenyltetrahydro-2H-1,3,5-thiadiazine- 2-thione), a potent hypolipidemic compound, in cholesterol biosynthesis in the liver, cholesterol absorption in small intestine, and cholesterol catabolism and excretion in rats. NIP-200 did not reduce cholesterol biosynthesis and had no effects on cholesterol absorption in the small intestine. In the cholesterol catabolism and excretion, NIP-200 induced increases in cholesterol and bile acids levels in the bile and acidic steroids in the feces, and it enhanced cholesterol 7 alpha-hydroxylase activity in the liver. These results suggest that NIP-200 increases the synthesis of bile acids as a result of the activation of cholesterol 7 alpha-hydroxylase, the rate-limiting enzyme in the conversion of cholesterol to bile acids. Therefore, it is considered that one of the probable mechanisms of the serum total cholesterol lowering action of NIP-200 involves the enhancement of catabolism and excretion of cholesterol in the liver.