Macrophages take up and metabolize negatively charged liposomes containing free cholesterol efficiently, resulting in a massive accumulation of cholesteryl esters and triacylglycerols in their cytoplasm (Nishikawa, K., Arai, H. and Inoue, K. (1990) J. Biol. Chem. 265, 5226-5231). This system was used to assess the effects of structural variation of sterol on the intracellular transport and the metabolism of endocytosed sterols by the cells. Liposomes containing phytosterols with an extra one (campesterol) or two (beta-sitosterol, stigmasterol, fucosterol) carbons at the C-24 position of the cholesterol side-chain were endocytosed as efficiently as those containing cholesterol without exhibiting any apparent toxicity on the cells. Esterification of endocyotosed phytosterols was, however, extremely low; campesterol esterification was only 20% that of cholesterol and either beta-sitosterol or stigmasterol was not esterified appreciably. A morphological study showed that the endocytosed phytosterols were accumulated in the phagolysosomes of the cells. Blocking of esterification of endocytosed cholesterol by an acyl-CoA:cholesterol acyltransferase (ACAT) inhibitor did not lead to cholesterol accumulation in the phagolysosomes. These data suggest that accumulation of endocytosed phytosterols in phagolysosomes is not a consequence of the inability of the cell to esterify sterols in the endoplasmic reticulum. In the light of these observations, we conclude that cultured macrophages can discriminate between sterols that differ only by a methyl or ethyl group at the C-24 position at their lysosomal compartment.