Daily intake of phytosterols (PSs) as a diet supplement can lower blood-cholesterol levels and reduce the risks of cardiovascular diseases. However, the high crystallinity, low water solubility, easy oxidizability, and other characteristics of PSs restrict their application and bioavailability in food products. The formulation parameters including the structures of PSs, delivery carriers, and food matrices may play an important role in the release, dissolution, transport, and absorption of PSs in functional foods. In this paper, the effects of formulation parameters, including phytosterol structures, delivery carriers, and food matrices, on the bioavailability of phytosterols are summarized and suggestions are provided for the formulation design of functional foods. The side chain and hydroxyl esterification group of PSs may significantly affect their lipid or water solubilities and micellization capacities, which in turn affect the bioavailability of PSs. Selecting suitable delivery carriers based on the characteristics of the food system can reduce the crystallinity and oxidation of PSs and control the release of PSs, thereby improving the PS stability and delivery efficiency. Moreover, the ingredients of the carriers or food products would also influence the release, solubility, transport, and absorption of PSs in the gastrointestinal tract (GIT).