Phytosterols (PS) or plant sterols are structurally similar to cholesterol. The most common PS are beta-sitosterol, campesterol and stigmasterol. Epidemiologic and experimental studies suggest that dietary PS may offer protection from the most common cancers in Western societies, such as colon, breast and prostate cancer. This review summarizes the findings of these studies and the possible mechanisms by which PS offer this protection. These include the effect of PS on membrane structure and function of tumor and host tissue, signal transduction pathways that regulate tumor growth and apoptosis, immune function of the host and cholesterol metabolism by the host. In addition, suggestions for future studies to fill the gaps in our knowledge have been given.