This study was designed to investigate the effects of dietary taurine on cholesterol metabolism in high-cholesterol-fed rats. Male Sprague-Dawley rats were randomly divided into two dietary groups (n = 6 in each group): a high-cholesterol diet containing 0.5% cholesterol and 0.15% sodium cholate, and a high-cholesterol diet with 5% (w/w) taurine. The experimental diets were given for 2 weeks. Taurine supplementation reduced the serum and hepatic cholesterol levels by 37% and 32%, respectively. Faecal excretion of bile acids was significantly increased in taurine-treated rats, compared with untreated rats. Biliary bile acid concentrations were also increased by taurine. Taurine supplementation increased taurine-conjugated bile acids by 61% and decreased glycine-conjugated bile acids by 53%, resulting in a significant decrease in the glycine/taurine (G/T) ratio. Among the taurine-conjugated bile acids, cholic acid and deoxycholic acid were significantly increased. In the liver, taurine supplementation increased the mRNA expression and enzymatic activity of hepatic cholesterol 7α-hydroxylase (CYP7A1), the rate-limiting enzyme for bile acid synthesis, by three- and two-fold, respectively. Taurine also decreased the enzymatic activity of acyl-CoA:cholesterol acyltransferase (ACAT) and microsomal triglyceride transfer protein (MTP). These observations suggest that taurine supplementation increases the synthesis and excretion of taurine-conjugated bile acids and stimulates the catabolism of cholesterol to bile acid by elevating the expression and activity of CYP7A1. This may reduce cholesterol esterification and lipoprotein assembly for very low density lipoprotein (VLDL) secretion, leading to reductions in the serum and hepatic cholesterol levels.