Cholesterol is one of the major structural constituents in a liposomal bilayer. Cholesterol is susceptible to various reactions in the presence of oxygen, heat, light, certain metals, and radicals during manufacturing or storage, which may cause to generate cholesterol oxidation products (COPs). Herein, we report the development of a liquid chromatography-mass spectrometry based analytical method for screening and quantitating COPs present in liposomal parenteral pharmaceutical formulations (LPFs) from four different vendors. We detected and quantitated six COPs and desmosterol in LPFs, and desmosterol is an intermediate of cholesterol biosynthesis. 7α-hydroxycholesterol, 7β-hydroxycholesterol, 7-keto-cholesterol, and desmosterol were the major cholesterol-related impurities in LPFs. COPs were not detected in any of USP/NF grade cholesterol raw materials, implying that COPs were generated during liposome manufacturing and/or storage. This validated method presented here can be used to quantify cholesterol-related impurities present in liposomal pharmaceutical formulations to ensure the quality and the safety of liposomal pharmaceutical formulations.