In order to examine the hypolipidemic and hepatic steatosis preventing activities, we investigated mechanism of Auricularia auricula-judae 70% ethanol extract (AAE) in vivo and in vitro. Normal diet (ND) and high fat diet (HFD) with or without 0.1% (w/w), 0.3% (w/w) and 1% (w/w) AAE were given to male C57BL/6 mice. Plasma lipids and liver enzymes were measured and tissue sections of liver were examined. Further mechanistic studies in mouse 3T3-L1 adipocytes were performed in vitro by verifying triglyceride, glycerol, GPDH (glycerol-3-phosphate dehydrogenase) activity and mRNA expression of adipogenic and lipogenic genes using RT-PCR amplification. Body weight and adipose tissue mass were significantly reduced in ND and (HFD plus AAE) fed mice compared to HFD mice. These findings suggest that AAE may reduce the risk of hepatic steatosis by modulating plasma lipids via the regulation of adipogenic/lipogenic transcriptional factors. AAE may have interesting applications to improve plasma lipids and liver enzymes (A part of results have been published in Int J Med Mushrooms).