Milk has been used commercially as a carrier for phytosterols, but there is limited knowledge on the effect of added plant sterols on the properties of the system. In this study, phytosterols dispersed in milk fat at a level of 0.3 or 0.6% were homogenized with an aqueous dispersion of whey protein isolate (WPI). The particle size, morphology, zeta-potential, and stability of the emulsions were investigated. Emulsion crystallization properties were examined through the use of differential scanning calorimetry (DSC) and Synchrotron X-ray scattering at both small and wide angles. Phytosterol enrichment influenced the particle size and physical appearance of the emulsion droplets, but did not affect the stability or charge of the dispersed particles. DSC data demonstrated that, at the higher level of phytosterol addition, crystallization of milk fat was delayed, whereas, at the lower level, phytosterol enrichment induced nucleation and emulsion crystallization. These differences were attributed to the formation of separate phytosterol crystals within the emulsions at the high phytosterol concentration, as characterized by Synchrotron X-ray measurements. X-ray scattering patterns demonstrated the ability of the phytosterol to integrate within the milk fat triacylglycerol matrix, with a concomitant increase in longitudinal packing and system disorder. Understanding the consequences of adding phytosterols, on the physical and crystalline behavior of emulsions may enable the functional food industry to design more physically and chemically stable products.