Salinity is an important environmental factor that can affect the metabolism of aquatic organisms, while cholesterol can influence cellular membrane fluidity which are vital in adaption to salinity changes. Hence, a 4-week feeding trial was conducted to evaluate the effects of water salinity (normal 23 psu and low 5 psu) and three dietary cholesterol levels (CH0.16, 0.16%, CH1.0, 1.0% and CH1.6, 1.6%) on osmoregulation, cholesterol metabolism, fatty acid composition, long-chain polyunsaturated fatty acid (LC-PUFA) biosynthesis, oxidative stress (OS), and endoplasmic reticulum stress (ERS) of the euryhaline fish black seabream (Acanthopagrus schlegelii). The results indicated that in low salinity, fish fed with the CH1.0 diet improved ion reabsorption and osmoregulation by increased Na+ concentration in serum as well as expression levels of osmoregulation-related gene expression levels in gills. Both dietary cholesterol level and water salinity significantly affected most cholesterol metabolic parameters in the serum and tissues, and the results showed that low salinity promoted cholesterol synthesis but inhibited cholesterol catabolism. Besides, in low salinity, hepatic expression levels of LC-PUFA biosynthesis genes were upregulated by fed dietary cholesterol supplementation with contents of LC-PUFAs, including EPA and DHA being increased. Malondialdehyde (MDA) was significantly increased in low-salinity environment, whereas MDA content was decreased in fish fed with dietary CH1.0 by activating related antioxidant enzyme activity and gene expression levels. A similar pattern was recorded for ERS, which stimulated the expression of nuclear factor kappa B (nf-κb), triggering inflammation. Nevertheless, fish reared in low salinity and fed with dietary CH1.0 had markedly alleviated ERS and downregulated gene expression levels of pro-inflammatory cytokines. Overall, these findings demonstrate that cholesterol, as an important nutrient, plays vital roles in the process of adaptation to low salinity of A. schlegelii, and provides a new insight into underlying adaptive strategies of euryhaline marine fish reared in low salinity.