Squalene is a biochemical precursor to both steroids and hopanoids. For sterols, the squalene conversion begins with oxidation (via squalene monooxygenase) of one of its terminal double bonds, resulting in 2,3-oxidosqualene. It then undergoes an enzyme-catalysed cyclisation to produce lanosterol, which can be elaborated into other steroids such as cholesterol and ergosterol in a multistep process by the removal of three methyl groups, the reduction of one double bond by NADPH and the migration of the other double bond. In many plants, this is then converted into stigmasterol, while in many fungi, it is the precursor to ergosterol.
The biosynthetic pathway is found in many bacteria, and most eukaryotes, though has not been found in Archaea.