A review of literature on the occurrence of 4-desmethyl sterols in unicellular algae indicates that few sterols are sufficiently restricted in distribution to be considered unambiguous markers for specific algal groups. Almost all of the 4-desmethyl sterols found in higher plants occur in marine algae, sometimes as major constituents, so sterol distributions do not always allow to distinguish between marine or terrigenous organic matter. Some of the problems associated with the use of sterols as markers for specific sources are highlighted by comparison of the sterol distribution in selected marine sediments and seawater samples. Although each sediment represents a very different depositional environment the sterol distributions are surprisingly similar. The sterol distributions in a saline Antarctic lake and samples of particulate matter from oligotrophic waters off the east Australian coast show that marine phytoplankton biosynthesize a wide range of sterols, including large amounts of 24-ethylcholest-5-en-3β-ol which is often used as a marker for terrigenous organic matter. Similar distributions occur in marine sediments from the upwelling area off Peru and in temperate intertidal sediments despite large differences in algal productivity between the two areas. In deeper sediments, most of the sterols are not derived from phytoplankton but from higher plants. These data indicate that inferences drawn from sterol distributions regarding sources of organic matter must be made with caution and should be supported using other lipid data. It further follows that in ancient sediments and crude oils a high proportion of C29 steranes need not indicate that most of the organic matter was derived from vascular plants.