Sequestration of misfolded proteins into distinct cellular compartments plays a pivotal role in proteostasis and proteopathies. Cytoplasmic ubiquitinated proteins are sequestered by p62/SQSTM1 to deposit in sequestosomes or aggresome-like induced structures (ALIS). Most aggresome or ALIS regulators identified thus far are recruiters, while little is known about the disaggregases or dissolvers. In this research, we showed that lanosterol synthase and its enzymatic product lanosterol effectively reduced the number and/or size of sequestosomes/ALIS/aggresomes formed by endogenous proteins in the HeLa and HEK-293A cells cultured under both non-stressed and stressed conditions. Supplemented lanosterol did not affect the proteasome and autophagic activities, but released the trapped proteins from the p62-positive inclusions accompanied with the activation of HSF1 and up-regulation of various heat shock proteins. Our results suggested that the coordinated actions of disaggregation by lanosterol and refolding by heat shock proteins might facilitate the cells to recycle proteins from aggregates. The disaggregation activity of lanosterol was not shared by cholesterol, indicating that lanosterol possesses additional cellular functions in proteostasis regulation. Our findings highlight that besides protein modulators, the cells also possess endogenous low-molecular-weight compounds as efficient proteostasis regulators.