Plant sterols and stanols (phytosterols) and their esters are nutraceuticals that lower LDL cholesterol, but the mechanisms of action are not fully understood. We hypothesized that intact esters and simulated hydrolysis products of esters (phytosterols and fatty acids in equal ratios) would differentially affect the solubility of cholesterol in model bile mixed micelles in vitro. Sodium salts of glycine- and taurine-conjugated bile acids were sonicated with phosphatidylcholine and either sterol esters or combinations of sterols and fatty acids to determine the amount of cholesterol solubilized into micelles. Intact sterol esters did not solubilize into micelles, nor did they alter cholesterol solubility. However, free sterols and fatty acids altered cholesterol solubility independently (no interaction effect). Equal contents of cholesterol and either campesterol, stigmasterol, sitosterol, or stigmastanol (sitostanol) decreased cholesterol solubility in micelles by approximately 50% compared to no phytosterol present, with stigmasterol performing slightly better than sitosterol. Phytosterols competed with cholesterol in a dose-dependent manner, demonstrating a 1:1 M substitution of phytosterol for cholesterol in micelle preparations. Unsaturated fatty acids increased the micelle solubility of sterols as compared with saturated or no fatty acids. No differences were detected in the size of the model micelles. Together, these data indicate that stigmasterol combined with saturated fatty acids may be more effective at lowering cholesterol micelle solubility in vivo.