Diosgenin, a steroidal sapogenin found in most of the Dioscorea spp is extensively used in the manufacture of cortisone and allied drugs. Increased transport and labour cost and decline in the diosgenin availability due to over exploitation of Dioscorea spp. led to deficit supply in world steroid market. Therefore a protocol for production of Diosgenin by biotransformation of cholesterol feeding exogenously as a precursor to the cell suspension and immobilized cell cultures of E. hyssopifolium was developed. Prior to the experiment the viability of the cells from node derived callus was tested using fluorescein diacetate. The viable cells that fluoresce yellow upon excitation were used for further studies. Cell suspension and immobilized cell cultures were treated with 50 and 100 mgl-1cholesterol. Cell growth and diosgenin content was examined starting from 8th day to 16th day after culture at intervals of 2 days. The maximum growth index of 1.96 was recorded in cell suspension culture treated with 50 mgl-1 after 16 days culture. The highest accumulation of diosgenin was obtained in immobilized cell cultures treated with 100 mgl-1 cholesterol on 12th day after culture. In all the cultures, the highest concentration of diosgenin on 12th day where as on 14th and 16th day there was a marginal decline.