Phytosterols (PS) have been shown to regulate cholesterol metabolism and alleviate hyperlipidemia (HLP), but the mechanism is still unclear. In this study, we investigated the mechanism by which PS regulates cholesterol metabolism in high-fat diet (HFD) mice. The results showed that PS treatment reduced the accumulation of total cholesterol (TC), triglycerides (TG), and low-density lipoprotein cholesterol (LDL-C) in the serum of HFD mice, while increasing the serum levels of high-density lipoprotein cholesterol (HDL-C). Compared with HFD mice, PS not only increased the antioxidant activity of the liver but also regulated the mRNA expression levels of enzymes and receptors related to cholesterol metabolism. The hypolipidemic effect of PS was abolished by antibiotic (Abx) intervention and reproduced by fecal transplantation (FMT) intervention. The results of 16S rRNA sequencing analysis showed that PS modulated the gut microbiota of mice. PS reduced the relative abundance of Lactobacillus and other bile salt hydrolase- (BSH-) producing gut microbiota in HFD mice, which are potentially related to cholesterol metabolism. These findings partially explain the mechanisms by which PS regulates cholesterol metabolism. This implies that regulation of the gut microbiota would be a potential target for the treatment of HLP.