Colorectal cancer is strongly associated with lipid metabolism. NPC1L1, a sterol transporter, plays a key role in modulating lipid homeostasis in vivo. Its inhibitor, ezetimibe, began to be used clinically to lower cholesterol and this caused the great debate on its role in causing carcinogenesis. Here we explored the role of NPC1L1 in colorectal tumorigenesis. Wild-type mice and NPC1L1−/− (NPC1L1 knockout) mice were treated with azoxymethane (AOM)-dextran sodium sulfate (DSS) to induce colitis-associated colorectal tumorigenesis. Mice were sacrificed 10, 15, 18 or 20 weeks after AOM treatment, respectively. Colorectal tumors were counted and analyzed. Plasma lipid concentrations were measured using enzymatic reagent kit. Protein expression level was assayed by western blot. NPC1L1−/− mice significantly had fewer tumors than wild-type. The ratio of malignant/tumor in NPC1L1−/− mice was significantly lower than in wild-type 20 weeks after AOM-DSS treatment. NPC1L1 was highly expressed in the small intestine of wild-type mice but its expression was undetectable in colorectal mucous membranes or tumors in either group. NPC1L1 knockout decreased plasma total cholesterol and phospholipid. NPC1L1−/− mice had significant lower intestinal inflammation scores and expressed inflammatory markers p-c-Jun, p-ERK and Caspase-1 p20 lower than wild-type. NPC1L1 knockout also reduced lymphadenectasis what may be caused by inflammation. NPC1L1 knockout in mice decreased β-catenin in tumors and regulated TGF-β and p-gp in adjacent colons or tumors. There was not detectable change of p53 by NPC1L1 knockout. Our results provide the first evidence that NPC1L1 knockout protects against colitis-associated tumorigenesis. NPC1L1 knockout decreasing plasma lipid, especially cholesterol, to reduce inflammation and decreasing β-catenin, p-c-Jun and p-ERK may be involved in the mechanism.