To be used as a source of astaxanthin by animals, the red yeast Xanthophyllomyces dendrorhous needs to be dried and the cell wall ruptured. Spray-drying and flat-roller milling successfully prepared the yeast as a feed additive with little loss of astaxanthin. Spray-drying successfully dried the yeast with negligible decomposition of astaxanthin compared to drum-drying. By repeated milling with a flat-roller mill, astaxanthin extracted with ethanol increased from 0.01 to 1.31 mg astaxanthin/g yeast. This method did not decompose astaxanthin in contrast to chemical digestion of the cell wall. Flat-roller milling effectively flattened and cracked the dried cells. Astaxanthin in yeast prepared by spray-drying and flat-roller milling was well absorbed by animals. Specifically, when spray-dried and milled yeast was supplied in the feed (40 mg astaxanthin/kg feed), astaxanthin was successfully absorbed (1,500 ng/mL blood and 1,100 ng/g skin) by laying hens.