The present study aimed to improve the cholesterol reduction capability of poorly water-soluble chitosan from mangrove crab (Scylla serrata) shells, which is prepared into solid dispersion (SD). As an anti-cholesterol agent, chitosan requires solubility enhancement, which can be facilitated in the SD system. SD was made using a solvent evaporation technique employing two carriers: Hydroxypropyl Methylcellulose (HPMC) and Polyvinylpyrrolidone (PVP) K-30. To compare its effectivity, direct physical mixtures (PM) were used with the same carriers and varied into eight formulas: chitosan:PVP K-30 = SD1 (1:1), PM1 (1:1), SD2 (1:2), PM2 (1:2); chitosan:HPMC = SD3 (1:0.25), PM3 (1:0.25), SD4 (1:0.5), PM4 (1:0.5). These formulas were characterized using SEM, XRD, and FTIR prior to in vitro cholesterol-binding evaluation. SEM results indicate that SD formulas were relatively bigger in average particle surface area than PM, except for SD1. This particle size correlates with the in vitro test, showing that SD formulas have a slightly higher cholesterol-binding capacity than PM, and SD2 had the largest cholesterol reduction percentage, which was 29.57%. The XRD evaluation showed that particles are amorphous, which can facilitate the solubility process. Meanwhile, FTIR evaluation illustrated no reaction between the active ingredient of chitosan and the carrier in the SD system.