This invention relates to novel N-Acyl and N-Alkyl modified quaternary ammonium polysaccharide fibers, or both N-Acyl and N-Alkyl modified quaternary ammonium polysaccharide fibers and pharmaceutical compositions comprising the modified fibers. Further the invention relates to processes for using such modified polysaccharide fibers to lower cholesterol, to lower a mammal's absorption and metabolic use of dietary fat as calories, or as a dietary fiber supplement. The polysaccharides may be modified with quaternary ammonium side chains that are capable of sequestering bile salts while other portions of the polysaccharide absorbs substantial amounts of oils or fats while dissipating the modified polysaccharide and oil complex in aqueous digestive fluids and solids. The N-Acyl modified polysaccharide intermediates are also useful to lower cholesterol, lower the absorption and metabolism of dietary fat, and as a simple dietary fiber.