Pollution from human and animal faecal waste is a major cause of deteriorating water quality and increased nutrient loads in coastal and inland waterways. Management of this problem depends on knowing which sources of faecal matter are the cause and what is the degree and extent of the pollution. Bacterial indicator organisms have long been the principal method used to test water samples for faecal contamination. However, none of the currently used bacterial indicators on their own are source specific enough to distinguish different sources of faecal matter. The use of faecal sterol biomarkers in conjunction with existing bacterial indicators offers a new way to distinguish sources of faecal contamination. This study investigates the sources of faecal sterols, the relationship of coprostanol to existing bacterial indicators of faecal pollution, the degradation of faecal sterols and the problem of determining the sources of faecal contamination and the distribution of faecal contamination using faecal sterol biomarkers. 5p-Stanols (i.e. faecal sterols) were found to be significant constituents of human, herbivore (i.e. cows, sheep etc.) and pig and cat faeces. Human faeces contained 73 ± 4% coprostanol in relation to the sum of coprostanol and 24-ethylcoprostanol and primary treated effluent contained 86 ± 0.4% coprostanol. Herbivore faeces contained 38 ± 4% coprostanol and 62 ± 4% 24-ethylcoprostanol whereas pig faeces contained 50 � 5% of each compound. Both birds and dogs faeces contained either trace amounts of 5B-stanols or they could not be detected. Notable differences were observed in the abundance of Closthdium perfringens spores between the faeces of birds and domestic pets such as cats and dogs. The above differences were subsequently exploited to distinguish faecal contamination in Lake Tuggerah. An examination of the relationships between coprostanol and bacterial indicator concentrations from several environments revealed that 60 and 400 ng L of coprostanol corresponded to currently defined primary and secondary contact limits for bacteria measured as either thermotolerant coliforms or enterococci in the environment. Four degradation experiments showed faecal sterols and related sterols such as cholesterol decay at similar rates. An induction period was observed in all experiments which meant that simple exponential equations to describe the rate of decay of coprostanol were inadequate; a complimentary log - log transformation of the data was used and the equation: Y = l-Exp(-Exp(time x -0.01 + temp x -0.158 + 3.33)) x 100 was derived where Y equals the predicted percentage of coprostanol remaining over time at a given temperature. In terms of persistence in the environment, Clostridium perfringens spores > coprostanol > enterococci > thermotolerant coliforms. Two field studies were undertaken to highlight the use of faecal sterols. In the Lake Tuggerah study, the results indicated that faecal contamination of receiving waters in the Tuggerah Lakes during rain events was significant, but was not derived from human faecal matter; rather it appears to be principally derived from native birds and, to a lesser extent, domestic pets. In the Derwent Estuary study, based on the distribution of the faecal biomarker coprostanol, the mid estuary and parts of the upper estuary (from Newtown Bay to Taroona), were found to be severely contaminated by sewage. In summary, the use of faecal sterols to trace faecal contamination were found to be an invaluable addition to the tools water managers use to investigate faecal pollution.