We employ off-lattice Monte Carlo simulations to study lateral diffusion in lipid-sterol bilayers using a two-dimensional model system which has been designed to simulate the experimental phase diagrams of both lipid-cholesterol and lipid-lanosterol systems. We focus on the effects of varying sterol concentration and temperature on the tracer diffusion coefficient, D, which characterizes the lateral motion of single tagged lipids in a bilayer. Generally, we find that increasing the cholesterol concentration suppresses D due to an increased conformational ordering of lipid chains. We argue that this effect competes with an increase in the average free area per lipid, which favours an increase in D. At temperatures close to the main transition temperature, the competition between the two effects leads to intriguing behavior of D. Overall, the model results are in excellent qualitative agreement with available experimental results for lipid-cholesterol mixtures. Additional studies of a model lipid-lanosterol system, for which experimental diffusion results are not available, predict that the presence of lanosterol has a smaller effect than cholesterol on reducing D relative to the pure lipid system. We conclude that the molecular model employed contains the essential features required to describe many of the qualitative features of the lateral diffusion behavior in lipid-sterol systems.