Onion has been shown to favorably modify the lipoprotein profile. However, research on its underlying mechanism is lacking. The present study investigated the interaction of dietary onion powder with the protein expression of key receptors and enzymes involved in cholesterol metabolism. Thirty-six male hamsters were randomly divided into three groups and fed a high-cholesterol control diet or the two experimental diets supplemented with 1% onion powder (OP-1) or 5% onion powder (OP-5), for a period of 8 weeks. It was found that onion dose-dependently decreased plasma total cholesterol (TC) level. The change in plasma lipoprotein profile was accompanied by a greater excretion of both fecal neutral and acidic sterols. Western blot analysis revealed that onion up-regulated sterol regulatory element binding protein 2 (SREBP-2), liver X receptor alpha (LXRα) and cholesterol-7α-hydroxylase (CYP7A1) with no effect on 3-hydroxy-3-methylglutaryl-CoA reductase (HMGR) and LDL receptor (LDL-R). It was concluded that the hypocholesterolemic activity of onion powder was mediated by enhancement of fecal sterol excretion and up-regulation of LXRα and CYP7A1.