The present study investigated the digestion and cholesterol-lowering effects of the water-soluble NSP guar gum (GG) and sodium alginate (SA) in laboratory animals. Groups of five male Wistar strain rats were fed semi-purified cholesterol-free diets containing 0, 50 or 100 g NSP source/kg for 21 d which comprised a 14-d adaptation period followed by a 7-d balance period. Weight gain over the balance period and food conversion ratio decreased linearly with increasing NSP intake (P=0.006 and P=0.07 respectively). DM digestibility decreased with increasing NSP intake (P=0.001) and this effect was greater for SA-containing diets compared with GG-containing diets (P=0.001). At the lower inclusion rate, 0.9–1.0 of the additional NSP was digested, but this value fell to 0.8 for both NSP sources at the 100 g/kg inclusion rate, implying that the capacity for near complete digestion of the test NSP had been exceeded. Intestinal tissue mass was increased in response to inclusion of both NSP sources. Caecal digesta pH decreased linearly with additional GG, but increased slightly with consumption of SA. Total caecal short-chain fatty acid concentrations (μmol/g caecal contents) increased markedly with 50 g GG/kg but did not increase further with 100 g GG/kg, and were slightly lower than control values in rats consuming SA. Plasma cholesterol concentration fell linearly (P=0.03) with increasing NSP in the diet and the effect was similar for both GG and SA. Total output of faecal bile acids rose in rats fed 50 g GG/kg and 50 g SA/kg (59 μmol/7 dv.24 μmol/7 d for control rats) with no further increase at the higher inclusion rate. These results show that SA has a strong hypocholesterolaemic effect in rats which is similar to that of GG, and that this effect is most likely to be mediated through an interruption in the entero-hepatic circulation of bile acids and not through increased hepatic supply of propionate from fermentation of the NSP in the large bowel.