Oxysterols are oxygenated derivatives of cholesterol generated from exogenous (food) or endogenous (auto-oxidation and enzymatic conversion) sources. Despite their hepatic capacity to transform into bile acids, oxysterols are present in the blood circulation and central nervous system. This review aims to provide a better understanding of the origins and roles of oxysterols under normal and pathophysiological conditions, such as atherosclerosis and Alzheimer's disease. Oxysterols are metabolites of the cholesterol auto-oxidation pathway present in atherosclerotic plaque and are concomitantly endogenous activators of nuclear receptor liver X receptors known to enhance cholesterol efflux. Despite their honourable role in the gastrointestinal tract and central nervous system, oxysterols have, in general, adverse effects in atherogenesis during which they accumulate and trigger cellular and molecular insults that lead to foam cell formation. This study will discuss the paradox that oxysterols are essential for the normal physiology of the hepatic, central nervous and vascular systems, but that they are also bioactive molecules that lead to adverse effects when they accumulate in the vascular wall.