Hydroxy-substituted azetidinone hypocholesterolemic agents of the formulaor a pharmaceutically acceptable salt thereof, wherein:Ar1 and Ar2 are aryl or R4-substituted aryl;Ar3 is aryl or R5-substituted aryl;X, Y and Z are —CH2—, —CH(lower alkyl)— or —C(dilower alkyl)—;R and R2 are —OR6, —O(CO)R6, —O(CO)OR9 or —O(CO)NR6R7;R1 and R3 are H or lower alkyl;q is 0 or 1; r is 0 or 1; m, n and p are 0-4; provided that at least one of q and r is 1, and the sum of m, n, p, q and r is 1-6; and provided that when p is O and r is 1, the sum of m, q and n is 1-5;R4 is selected from lower alkyl, R5, —CF3, —CN, —NO2 and halogen R5 is selected from —OR6, —O(CO)R6, —O(CO)OR9, —O(CH2)1-5OR6, —O(CO)NR6R7, —NR6R7, —NR6(CO)R7, —NR6(CO)OR9, —NR6(CO)NR7R8, —NR6SO2R9, —COOR6, —CONR6R7, —COR6, —SO2NR6R7, S(O)0-2R9, —O(CH2)1-10—COOR6, —O(CH2)1-10CON6R7, —(lower alkylene)COOR6 and —CH═CH—COOR6;R6, R7 and R8 are H, lower alkyl or aryl-substituted IcR9 is lower alkyl, aryl or aryl-substituted lower alkyl;are disclosed, as well as a method of lowering serum cholesterol by administering said compounds, alone or in combination with a cholesterol biosynthesis inhibitor, pharmaceutical compositions containing them; and a process for preparing them.