This invention relates to novel N-acyl modified polysaccharides and pharmaceutical compositions comprising the modified polysaccharides. Further the invention relates to processes for using such compounds to inhibit lipases, to lower cholesterol, to lower the absorption of dietary fat, or as a dietary fiber supplement. In a preferred aspect of the invention the modified polysaccharides are capable of absorbing substantial amounts of oils or fats while dissipating in an aqueous solution. The invention also relates to a non-absorbable and essentially non-digestible polysaccharide fiber composition.