A significant reduction in plasma concentration of cholesterol during early lactation is a common occurrence in high-yielding dairy cows. An insufficient synthesis of cholesterol in the liver has been linked to lipid accumulation caused by high concentrations of fatty acids during negative energy balance (NEB). As ruminant diets do not provide quantitative amounts of cholesterol for absorption, phytosterols such as β-sitosterol may serve to mitigate the shortfall in cholesterol within the liver during NEB. To gain mechanistic insights, primary hepatocytes were isolated from healthy female 1-day old calves for in vitro studies with or without 1.2 mM fatty acids (FA) to induce metabolic stress. Furthermore, hepatocytes were treated with 50 μM β-sitosterol with or without FA. Data were analyzed by one-way ANOVA with subsequent Bonferroni correction. Results revealed that calf hepatocytes treated with FA had greater content of non-esterified fatty acids (NEFA) and triacylglycerol (TAG), and greater mRNA and protein abundance of the lipid synthesis-related SREBF1 and FASN. In contrast, mRNA and protein of CPT1A (fatty acid oxidation) and the cholesterol metabolism-related targets SREBF2, HMGCR, ACAT2, APOA1, ABCA1 and ABCG5 was lower. Content of the antioxidant-related glutathione (GSH) and activities of superoxide dismutase (SOD) also was lower. Compared with FA challenge alone, 50 μM β-sitosterol led to greater mRNA and protein abundance of SREBF2, HMGCR, ACAT2 and ABCG5, and greater content of GSH and activity of SOD. In contrast, compared with the FA group, the mRNA and protein abundance of SREBF1 and ACC1 and the content of TAG and NEFA in the β-sitosterol + FA group were lower. Overall, β-sitosterol can promote cholesterol metabolism and reduce oxidative stress while reducing lipid accumulation in hepatocytes challenged with high concentrations of fatty acids.