The purpose of this review is to be a comprehensive treatise on biological, chemical and nutraceutical aspects of phytosterols, as well as extraction methods and new trends in food industry. The term “phytosterols” covers plant sterols and their hydrogenation products, the stanols. The phytosterols are effective in lowering plasma total and low density lipoprotein (LDL) cholesterol, by inhibiting the absorption of cholesterol from the small intestine. The phytosterols isolation method is using nonpolar solvents (such as hexane, methylene chloride, ethanol and isopropanol) near their supercritical region where they have high extraction properties. The enrichment of foods such as margarine with plant sterol/stanol ester is one of the recent developments in functional foods to enhance the cholesterol lowering ability of traditional food products.