Sterols constitute vital structural and regulatory components of eukaryotic cells. In the oleaginous microorganismSchizochytriumsp. S31, the sterol biosynthetic pathway primarily produces cholesterol, stigmasterol, lanosterol, and cycloartenol. However, the sterol biosynthesis pathway and its functional roles inSchizochytriumremain unidentified. ThroughSchizochytriumgenomic data mining and a chemical biology approach, we firstin silicoelucidated the mevalonate and sterol biosynthesis pathways ofSchizochytrium. The results showed that owing to the lack of plastids inSchizochytrium, it is likely to use the mevalonate pathway as the terpenoid backbone pathway to supply isopentenyl diphosphate for the synthesis of sterols, similar to that in fungi and animals. In addition, our analysis revealed a chimeric organization of theSchizochytriumsterol biosynthesis pathway, which possesses features of both algae and animal pathways. Temporal tracking of sterol profiles reveals that sterols play important roles inSchizochytriumgrowth, carotenoid synthesis, and fatty acid synthesis. Furthermore, the dynamics of fatty acid and transcription levels of genes involved in fatty acid upon chemical inhibitor-induced sterol inhibition reveal possible co-regulation of sterol synthesis and fatty acid synthesis, as the inhibition of sterol synthesis could promote the accumulation of fatty acid inSchizochytrium.Sterol and carotenoid metabolisms are also found possibly co-regulated, as the inhibition of sterols led to decreased carotenoid synthesis through down-regulating the geneHMGRandcrtIBYinSchizochytrium. Together, elucidation of theSchizochytriumsterol biosynthesis pathway and its co-regulation with fatty acid synthesis lay the essential foundation for engineeringSchizochytriumfor the sustainable production of lipids and high-value chemicals.