The objective of the present study was to examine the anti-inflammatory effects of β-sitosterol (SIT), the most common phytosterol in the diet, and to investigate its involvement in NF-κB and STAT1 pathways as potential mechanisms. In addition, the activity of the phosphatase SHP-1 as a negative modulator to these pathways, was investigated. Utilizing murine J774A.1 macrophages, cells were treated with various physiological concentrations of SIT and stimulated with LPS (100 ng/ml) for 6 h. Results indicate that 1 and 16 μM SITs increased SHP-1 activity by 300% and 200%, respectively. Similar results were obtained using western blot analysis. Additionally, we observed reductions in the release of some pro-inflammatory cytokines and chemokines as well as an increase in anti-inflammatory IL-10 with SIT treatments. The results also demonstrate the inhibition of STAT1 with SIT treatment. Moreover, translocation of NF-κB to the nucleus was inhibited with SIT as indicated by decreased phosphorylation and the use of ImageStream cytometry. In conclusion, the present study demonstrates the anti-inflammatory effect on macrophages by inactivating STAT1 and NF-κB, which could be mediated by the activation of SHP-1.