Parts used and where grown: This substance, native to China, is a fermentation by-product of cooked non-glutinous rice on which red yeast has been grown. The red yeast rice is used medicinally.

Historical or traditional use Since 800 AD, red yeast rice has been employed by the Chinese as both a food and a medicinal agent. Its therapeutic benefits as both a promoter of blood circulation and a digestive stimulant were first noted in the traditional Chinese pharmacopeia, Ben Cao Gang Mu-Dan Shi Bu Yi, during the Ming Dynasty (1368–1644). Practitioners of traditional Chinese medicine utilize red yeast rice to treat abdominal pain due to stagnant blood and dysentery, as well as external and internal trauma. In addition to its therapeutic applications, red yeast rice has been used for centuries as a flavor enhancer, a food preservative, and a base for a Taiwanese alcoholic rice-wine beverage. Active constituents: In addition to rice starch, protein, fiber, sterols, and fatty acids, red yeast rice contains numerous active constituents, including monacolin K, dihydromoncolin, and monacolin I to VI.

Researchers have determined that one of the ingredients in red yeast rice, called monacolin K, inhibits the production of cholesterol by stopping the action of a key enzyme in the liver (e.g., HMG-CoA reductase) that is responsible for manufacturing cholesterol. The drug lovastatin (Mevacor®) acts in a similar fashion to this red yeast rice ingredient. However, the amount per volume of monacolin K in red yeast rice is small (0.2% per 5 mg) when compared to the 20–40 mg of lovastatin available as a prescription drug. This has prompted researchers to suggest that red yeast rice may have other ingredients, such as sterols, that may also contribute to lowering cholesterol.

Along with its evaluation in animal trials, red yeast rice has been clinically investigated as a therapy for reducing cholesterol in two human trials. In one study, both men and women taking red yeast rice each day for two months had significant decrease in serum cholesterol levels. In addition, persons taking red yeast rice had a significant increase in HDL ("good") cholesterol and a decrease in LDL ("bad") cholesterol. Elevated triglycerides were also found to be lowered.

Similar to the preceding study, a more carefully controlled trial at the UCLA School of Medicine determined that red yeast rice in capsules significantly decreased total, LDL, and triglyceride cholesterol levels in 83 individuals with elevated cholesterol after 12 weeks of therapy. However, unlike the original study, HDL values did not increase substantially when compared to the control group.