Red yeast rice is a source of fermented pigment with possible bioactive effect. Evidence shows that fermented red yeast rice lowers cholesterol levels moderately compared to other statin drugs, but with the added advantage of causing less adverse effects. A review of the body of evidence surrounding the properties of red yeast rice underscores its potential as a new alternative to lipid level control. It is concluded from the present evidence that other types of pigmented rice possess opportunities for development as new functional foods.