Low-fat Cheddar cheese was manufactured using a β-glucan, hydrocolloidal fat replacer denoted as Nutrim. The composition, production efficiency, microstructure, and utility of replacing fat with Nutrim were examined. Cheese samples (designated as Nutrim-I, and Nutrim-II) containing Nutrim were produced with mean fat levels of 6.84 and 3.47%, respectively. A low-fat cheese was also produced as a control with a mean fat level of 11.2%. Nutrim-II cheese had significantly higher moisture, salt, and ash contents as compared with the low-fat control cheese. The low-fat control cheese had a higher yield normalized for 54% moisture and 1.5% salt content as compared with the Nutrim-II cheese. Scanning electron microscopy revealed smaller and more uniform fat droplet voids in the Nutrim cheese than the low-fat control, and a more dense, noncontinuous background protein matrix with globular clusters suggesting a physical buffering afforded by the presence of the β-glucan hydrocolloid or its associated water.