Molecular fossils (or biomarkers) are key to unraveling the deep history of eukaryotes, especially in the absence of traditional fossils. In this regard, the sterane 24-isopropylcholestane has been proposed as a molecular fossil for sponges, and could represent the oldest evidence for animal life. The sterane is found in rocks ∼650-540 million y old, and its sterol precursor (24-isopropylcholesterol, or 24-ipc) is synthesized today by certain sea sponges. However, 24-ipc is also produced in trace amounts by distantly related pelagophyte algae, whereas only a few close relatives of sponges have been assayed for sterols. In this study, we analyzed the sterol and gene repertoires of four taxa (Salpingoeca rosetta, Capsaspora owczarzaki, Sphaeroforma arctica, and Creolimax fragrantissima), which collectively represent the major living animal outgroups. We discovered that all four taxa lack C30 sterols, including 24-ipc. By building phylogenetic trees for key enzymes in 24-ipc biosynthesis, we identified a candidate gene (carbon-24/28 sterol methyltransferase, or SMT) responsible for 24-ipc production. Our results suggest that pelagophytes and sponges independently evolved C30 sterol biosynthesis through clade-specific SMT duplications. Using a molecular clock approach, we demonstrate that the relevant sponge SMT duplication event overlapped with the appearance of 24-isopropylcholestanes in the Neoproterozoic, but that the algal SMT duplication event occurred later in the Phanerozoic. Subsequently, pelagophyte algae and their relatives are an unlikely alternative to sponges as a source of Neoproterozoic 24-isopropylcholestanes, consistent with growing evidence that sponges evolved long before the Cambrian explosion ∼542 million y ago.