Rabbits receiving 0.5% neo-mycin in their drinking fluid and receiving a 2% cholesterol diet exhibited a statistically significant greater elevation of serum lipids and more severe aortic atherosclerosis than untreated controls maintained on a similar diet. The intramuscular injection of this antibiotic was without this effect. No alteration in endogenous lipid metabolism was observed in rabbits receiving neomycin without dietary supplement of cholesterol. The failure to observe hypertension, alteration of the cholesterol: phospholipid ratios or other factors which might explain the differences observed strongly suggests that neomycin exerts its effect by enhancing the intestinal absorption of cholesterol.