The earliest fossils of animal-like organisms occur in Ediacaran rocks that are approximately 571 million years old. Yet 24-isopropylcholestanes and other C30 fossil sterol molecules have been suggested to reflect an important ecological role of demosponges as the first abundant animals by the end of the Cryogenian period (>635 million years ago). Here, we demonstrate that C30 24-isopropylcholestane is not diagnostic for sponges and probably formed in Neoproterozoic sediments through the geological methylation of C29 sterols of chlorophyte algae, the dominant eukaryotes at that time. These findings reconcile biomarker evidence with the geological record and revert the oldest evidence for animals back into the latest Ediacaran.