Shrimp oil is extracted from shrimp (Litopenaeus vannamei) cephalothorax and subjected to the removal of cholesterol by beta-cyclodextrin (beta CD). Different oil/beta CD ratios (1:2, 1:3, and 1:4, w/w) and homogenization times (1, 10, and 20 min) are used. Cholesterol deduction is attained with increasing beta CD levels and homogenization time. Astaxanthin content is augmented, while cholesterol concentration is reduced. Nevertheless, oil yield and astaxanthin concentration of treated oil are decreased as beta CD levels are increased. To increase the oil yield, the used beta CD is further extracted for three times with ethyl acetate at 1:10 (w/v) ratio, in which yield is increased from 44.6% to 64%. Cholesterol removal of 95% is obtained, while astaxanthin content is increased. Lipid oxidation is lowered as indicated by the lower TOTOX value, peroxide value, thiobarbituric acid reactive substances, and p-anisidine value. However, lipid hydrolysis is slightly increased after treatment. Volatiles, especially aldehydes and alcohols, are decreased after treatment. FTIR spectra confirm the removal of phospholipid, which might be associated with the decreased oil yield after treatment. With the developed process, total fatty acid is increased by 15.6%, in which monounsaturated fatty acid (MUFA) and polyunsaturated fatty acid (PUFA) are augmented. beta CD could remove cholesterol, increase astaxanthin and fatty acid content. Practical Applications: Shrimp oil has been known to be a rich source of astaxanthin and PUFAs with health benefit. However, it also contains cholesterol, which can be a drawback for consumption as the supplement. The removal of cholesterol, while maintaining PUFA and astaxanthin could pave a way for promoting the intake of shrimp oil. Use of beta CD for oil treatment with subsequent extraction of remaining oil in the used beta CD could be implemented with ease. Another advantage of the developed process is to increase both fatty acid and astaxanthin contents in the resulting oil. As a consequence, shrimp oil with lowered cholesterol can be directly used as food ingredient and also for neutraceutical purpose.