A new combined method including the enzymatic hydrolysis of $eta$-cyclodextrin ($eta$-CD) and solvent extraction fo cholesterol from the hydrolyzed mixture was developed to recover cholesterol from a $eta$-CD-cholesterol complex prepared from dairy products, such as cream, milk, and cheese. Cyclomaltodextrinase (cyclomatodextrin dextrin hydrolase, EC 3.2.1.54, DCase_ prepared form alkalophilic Bacillus sp. KJ 133 hydrolyzed the $eta$-DC of the $eta$-CD-cholesterol complex, and then, free cholesterol was efficiently extracted from the hydrolyzed mixture by a nonpolar solvent such as ethyl acetate. To increase the stability of free CDase, immobilized CDase was developed using sodium alginate as a carrier. The immobilized CDase showed a high recovery yield of cholesterol in a time-dependent manner compared to the free CDase. A gas chromatography analysis showed that more than 70% of cholesterol was recovered from the $eta$-DC-cholesterol complex of cream by the immobilized CDase, whereas only 3% and 29% of cholesterol were recovered when the solvent extraction and free CDase treatment were used, respectively. The cholesterol recovered can be used as a raw material for steroid synthesis. Furthermore, this method can be an efficient way to recover cholesterol or other organic compounds that are bound in a $eta$ -DC-cholesterol or -organic compound complex.