There is growing research interest in the hypocholesterolemic effect of various food components such as polyphenols. In this study, we examined the effects of oligonol—a low-molecular weight polyphenol extracted from lychee fruit—on cholesterol metabolism in rats under short-term administration. Administration of oligonol for 3 days significantly increased cecum weight and decreased cecal n-butyric acid concentrations in rats. Oligonol also significantly lowered the levels of hepatic cholesterol and increased the levels of total neutral steroids excreted in the feces. It also increased fecal β-muricholic acid significantly, whereas the levels of total acidic steroids remained unchanged. Gene expression of hepatic CYP7A1 (cytochrome P450 family 7 subfamily A member 1) significantly increased following the administration of oligonol. This increase could be ascribed to changes in the expression of farnesoid X receptor, small heterodimer partner, and fibroblast growth factor 15 in ileum. Our data suggest that oligonol induces hypocholesterolemic effects through the inhibition of biliary cholesterol absorption from the intestine and the upregulation of cholesterol catabolism in rats even following short-term administration. Therefore, oligonol may be an important food component for reducing cholesterol level.