Red fermented rice, also known as red yeast rice, Hongqu, Anka or red Koji, is the fermented product of rice on which red yeast (Monascus purpureus) has been grown. For a thousand of years it has been used in China to make rice wine, as a food preservative for maintaining the color and taste of fish or meat and as a traditional medicine for digestive and vascular function. A complete and detailed description of its manufacture and medicinal properties are found in the ancient Chinese pharmacopoeia, published during the Ming Dynasty (1368–1644 a.d.). Over the past decade, there has been increased scientific interest in red yeast rice, as an alternative therapy for hyper cholesterolemia. Many studies have demonstrated that red yeast rice may be especially useful for treating patients who refuse to take statin drugs because of philosophical reasons or patients who are unable to tolerate statin therapy due to statin-associated myalgias. The major components found in red yeast rice, known as monacolins (polyketides), are reported to exhibit a cholesterol lowering action by inhibiting the 3-hydroxy-3-methyl-glutaryl coenzyme A (HMG-CoA) reductase. Still, it is believed that the hypolipidemic effect of red yeast rice cannot be accounted for only by the monacolins, but by a synergy of all other components present in red yeast rice: plant sterols, isoflavones and isoflavone glycosides, selenium and zinc. The most important toxic component in red fermented rice is citrinin, a mycotoxin produced by red yeast (Monascus purpureus). It has been known to cause kidney and liver damage in humans. Therefore, Japan has issued an advisory limit of 200 ppb while the European Union has a recommended limit of 100 ppb. The aim of our work was to develop a new LC/MS/MS method for identification of active components, monacolin K (lovastatin) and monacolin K acid and toxic component, citrinin, present in red yeast rice capsules.