Astaxanthin (Asx) is known to be a potent quencher of singlet oxygen and an efficient scavenger of superoxide anion. Therefore, Asx would be expected to be a useful antioxidant for the prevention of oxidative stress, a causative factor in severe diseases such as ischemic reperfusion injury. However, it is still unclear whether Asx has scavenging capability against the most potent reactive oxygen species (ROS), hydroxyl radical, because the hydrophobicity of Asx prevents analysis of hydroxyl radical scavenging ability in aqueous solution. In this study, to solve this problem, liposomes containing Asx (Asx-lipo), which could be dispersed in water, were prepared, and the scavenging ability of Asx-lipo for the hydroxyl radical was examined. The liposomal formulation enabled encapsulation of a high concentration of Asx. Asx-lipo gave a dose-dependent reduction of chemiluminescence intensity induced by hydroxyl radical in aqueous solution. Hydroxyl radical scavenging of Asx was more potent than α-tocopherol. The absorbance of Asx in the liposome decreased after reduction of hydroxyl radicals, indicating the direct hydroxyl radical scavenging by Asx. Moreover, Asx-lipo prevented hydroxyl radical-induced cytotoxicity in cultured NIH-3T3 cells. In conclusion, Asx has potent scavenging capability against hydroxyl radicals in aqueous solution, and this paper is the first report regarding hydroxyl radial scavenging by Asx.