In present study, three strains of lactic acid bacteria (LAB) viz. Lactobacillus casei, Lactobacillus acidophilus and Lactococcus lactis and milk fermented with these strains have been studied for antioxidant and cholesterol assimilation activities in-vitro and in-vivo, in addition to the effect on total lactobacilli, lactococci and coliform counts into the gut of mice fed with diets supplemented by fermented milk. All three selected strains exhibited potent 2,2-diphenyl-1-picrylhydrazyl, malonaldialdehyde and hydrogen peroxide radical scavenging abilities as well as inhibition of linoleic acid peroxidation activity. These activities were highest in Lb. casei as followed by Lb. acidophilus and Lc. lactis. In addition, these bacterial cultures also exhibited good in-vitro cholesterol assimilation potential. Oral administration to mice of milk fermented with selected LAB strains, slightly decreased blood cholesterol, increased colonization of total lactobacilli and lactococci, and decreased coliforms in the intestinal tissues as well as faecal samples. These results indicate that, selected LAB strains have good antioxidant, hypocholesterolemic and coliform removal activities. It may suggest that, a novel functional food can be obtained by supplementation of selected LAB in milk, which may have various health beneficial properties such as antioxidant and hypocholesterolemic activities.