Phytosterols are a class of lipid molecules present in plants that are structurally similar to cholesterol and have been widely utilized as cholesterol-lowering agents. However, the susceptibility of phytosterols to oxidation has led to concerns regarding their safety and tolerability. Phytosterol oxidation products (POPs) present in a variety of enriched and non-enriched foods can show pro-atherogenic and pro-inflammatory properties. Therefore, it is crucial to screen and analyze various phytosterol-containing products for the presence of POPs and ultimately design or modify phytosterols in such a way that prevents the generation of POPs and yet maintains their pharmacological activity. The main approaches for the analysis of POPs include the use of mass spectrometry (MS) linked to a suitable separation technique, notably gas chromatography (GC). However, liquid chromatography (LC)-MS has the potential to simplify the analysis due to the elimination of any derivatization step, usually required for GC-MS. To reduce the transformation of phytosterols to their oxidized counterparts, formulation strategies can theoretically be adopted, including the use of microemulsions, microcapsules, micelles, nanoparticles, and liposomes. In addition, co-formulation with antioxidants, such as tocopherols, may prove useful in substantially preventing POP generation. The main objectives of this review article are to evaluate the various analytical strategies that have been adopted for analyzing them. In addition, formulation approaches that can prevent the generation of these oxidation products are proposed.