Highland barley is a well-known cereal in Qinghai-Tibet Plateau area with high nutritional value, which has been reported to be a health-promoting grain for the obesity and the diabetes. Fermentation by certain microbiota can improve the flavor property and nutritional characteristics. In the present study, Lactiplantibacillus plantarum and Saccharomyces cerevisiae were singly or jointly applied to ferment highland barley, and the profile of volatile substances and lipid-lowering effects of the respective extracts were analyzed. Results indicated that either L. plantarum or S. cerevisiae or co-fermentation could consume the polysaccharides of highland barley to provide energy, and dramatically increase the contents of total protein and polyphenol. Gas chromatography-mass spectrometry (GC-MS) analysis revealed that the presence of S. cerevisiae was critical for production of the pleasant flavors, especially for the ethyl ester substances including hexadecanoic acid ethyl, hexanoic acid ethyl ester and so on. Meanwhile, we found that fermented highland barley extracts by L. plantarum exhibited stronger lipid-lowering effects in Caenorhabditis elegans than that by S. cerevisiae, while the co-fermentation not only emitted pleasant odors but also exerted high hypolipidemic function. In all, co-fermentation by L. plantarum and S. cerevisiae was proposed to be a promising processing to improve the flavor and functional properties of highland barley.