Amyloid-β (Aβ), major constituent of senile plaques in Alzheimer's disease (AD), is generated by proteolytic processing of the amyloid precursor protein (APP) by β- and γ-secretase. Several lipids, especially cholesterol, are associated with AD. Phytosterols are naturally occurring cholesterol plant equivalents, recently been shown to cross the blood-brain-barrier accumulating in brain. Here, we investigated the effect of the most nutritional prevalent phytosterols and cholesterol on APP processing. In general, phytosterols are less amyloidogenic than cholesterol. However, only one phytosterol, stigmasterol, reduced Aβ generation by (1) directly decreasing β-secretase activity, (2) reducing expression of all γ-secretase components, (3) reducing cholesterol and presenilin distribution in lipid rafts implicated in amyloidogenic APP cleavage, and by (4) decreasing BACE1 internalization to endosomal compartments, involved in APP β-secretase cleavage. Mice fed with stigmasterol-enriched diets confirmed protective effects in vivo, suggesting that dietary intake of phytosterol blends mainly containing stigmasterol might be beneficial in preventing AD.