Cancer remains as one of the most common cause of mortality worldwide. Cancer chemoprevention by natural products is well accepted nowadays. Phytoserols are natural products, showing anticancer activity, besides other activities. The purpose of this study was to examine the antitumor and antioxidant activity of stigmasterol, a phytosterol isolated from aerial parts of $Bacopa$ $monnieri$ Linn. against Ehrlich Ascites Carcinoma (EAC) in swiss albino mice. The effect of stigmasterol on the growth of transplantable murine tumor, life span of EAC bearing hosts, simultaneous alterations in the hematological profile, liver biochemical parameters (lipid peroxidation, antioxidant enzymes) and histopthological studies of liver were examined. Stigmasterol decreased tumor volume, packed cell volume and viable cell count, and increased mean survival time thereby increasing life span of EAC tumor bearing mice. Hematological profile reverted to near normal levels in stigmasterol treated mice. Stigmasterol decreased the levels of lipid peroxidation and increased the levels of glutathione, superoxide dismutase and catalase in the liver of EAC bearing mice. Histopathological study of liver tissues showed that stigmasterol had significant protective effect against EAC bearing mice, which corroborates the above findings. Lactate dehydrogenase (LDH) activity in ascitic fluid increased while membrane microviscosity of the EAC cells decreased upon stigmasterol treatment indicating its effect in the membrane integrity functions. The antitumor activity of stigmasterol might be mediated through the activation of protein phosphatase 2A by ceramide causing apoptosis, as is shown by structurally similar phytosterol.