Eukaryotes produce highly modified sterols, including cholesterol, essential to eukaryotic physiology. Although few bacterial species are known to produce sterols, de novo production of cholesterol or other complex sterols in bacteria has not been reported. Here, we show that the marine myxobacterium Enhygromyxa salina produces cholesterol and provide evidence for further downstream modifications. Through bioinformatic analysis we identify a putative cholesterol biosynthesis pathway in E. salina largely homologous to the eukaryotic pathway. However, experimental evidence indicates that complete demethylation at C-4 occurs through unique bacterial proteins, distinguishing bacterial and eukaryotic cholesterol biosynthesis. Additionally, proteins from the cyanobacterium Calothrix sp. NIES-4105 are also capable of fully demethylating sterols at the C-4 position, suggesting complex sterol biosynthesis may be found in other bacterial phyla. Our results reveal an unappreciated complexity in bacterial sterol production that rivals eukaryotes and highlight the complicated evolutionary relationship between sterol biosynthesis in the bacterial and eukaryotic domains.