Wool fiber is commonly dyed with synthetic dyes in water medium, which may cause resource and environmental pressure arising from consumption of water and toxic chemicals. In this study, wool yarn was dyed with natural Monascus pigments in decamethylcyclopentasiloxane (D5) medium to minimize water consumption and effluent generation. Results indicated that K/S value of wool yarn dyed in D5 medium was higher than that of the samples dyed using the conventional aqueous dyeing methods. Moreover, wool yarn exhibited the highest color strength, good color fastness and bacteriostatic rate of 71.25% against Staphylococcus aureus when it was dyed under pH3 at 80 °C for 50 min. Meanwhile, XRD analysis revealed that crystal property of wool yarn did not change significantly when it was dyed in D5 solvent, and a similar phenomenon was observed in surface morphology by SEM analysis.