The metabolic fate of newly absorbed cholesterol and phytosterol is orchestrated through adenosine triphosphate-binding cassette transporter G5 and G8 heterodimer (G5G8), and acyl CoA:cholesterol acyltransferase 2 (ACAT2). We hypothesized that intestinal G5G8 limits sterol absorption by reducing substrate availability for ACAT2 esterification and have attempted to define the roles of these two factors using gene deletion studies in mice. Male ACAT2(-/-), G5G8(-/-), ACAT2(-/-)G5G8(-/-) (DKO), and wild-type (WT) control mice were fed a diet with 20% of energy as palm oil and 0.2% (w/w) cholesterol. Sterol absorption efficiency was directly measured by monitoring the appearance of [(3)H]sitosterol and [(14)C]cholesterol tracers in lymph after thoracic lymph duct cannulation. The average percentage (± SEM) absorption of [(14)C]cholesterol after 8 h of lymph collection was 40.55 ± 0.76%, 19.41 ± 1.52%, 32.13 ± 1.60%, and 21.27 ± 1.35% for WT, ACAT2(-/-), G5G8(-/-), and DKO mice, respectively. [(3)H]sitosterol absorption was <2% in WT and ACAT2(-/-) mice, whereas it was up to 6.8% in G5G8(-/-) and DKO mice. G5G8(-/-) mice also produced chylomicrons with ∼70% less cholesterol ester mass than WT mice. In contrast to expectations, the data demonstrated that the absence of G5G8 led to decreased intestinal cholesterol esterification and reduced cholesterol transport efficiency. Intestinal G5G8 appeared to limit the absorption of phytosterols; ACAT2 more efficiently esterified cholesterol than phytosterols. The data indicate that handling of sterols by the intestine involves both G5G8 and ACAT2 but that an additional factor (possibly Niemann-Pick C1-like 1) may be key in determining absorption efficiency.