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)1-10CONR6R7, -(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.