Oxycarotenoid lutein (3,3'-dihydroxy-β,ε-carotene) was checked for anticarcinogenic activity against N-nitrosodiethylamine-induced hepatocellular carcinoma (HCC) in rats. Lutein could significantly reduce the altered morphological and pathological changes in the liver induced by N-nitrosodiethylamine. Biochemical analysis of serum and tissues indicated that alanine transaminase, aspartate transaminase, and alkaline phosphatase were significantly elevated in the control group and significantly reduced in the lutein-treated groups. These enzymes in liver tissue, which were found to be elevated in the control group, were significantly reduced in the lutein-treated groups. Glutathione level was low in the control groups and it was found to be increased in the treated groups. The activity of γ-glutamyl transpeptidase, a marker of cellular proliferation, was found to be significantly elevated in both the serum and the liver in the control group, which was reduced by the administration of lutein. Studies on the mechanism of action of lutein have indicated that it could significantly inhibit cytochrome P450 enzymes in vitro and in vivo in rats. Moreover, lutein could enhance the detoxifying enzymes glutathione-S-transferase and UDP glucuronyl transferase in vivo. Inhibition of carcinogenesis by lutein could be because of a combined effect of its antioxidant activity along with the inhibition of cytochrome P450 enzymes and inducing detoxifying enzymes. Lutein is nontoxic and is one of the prime compounds in the chemoprevention trials of the future.