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Ordered lipid domains enriched in sphingolipids and cholesterol (lipid rafts) have been implicated in numerous functions in biological membranes. We recently found that lipid domain/raft formation is dependent on the sterol component having a structure that allows tight packing with lipids having saturated acyl chains (Xu, X., and London, E. (2000) Biochemistry39, 844–849). In this study, the domain-promoting activities of variousnaturalsterols were compared with that of cholesterol using both fluorescence quenching and detergent insolubility methods. Using model membranes, it was shown that, like cholesterol, both plant and fungal sterols promote the formation of tightly packed, ordered lipid domains by lipids with saturated acyl chains. Surprisingly ergosterol, a fungal sterol, and 7-dehydrocholesterol, a sterol present in elevated levels in Smith-Lemli-Opitz syndrome, were both significantly more strongly domain-promoting than cholesterol. Domain formation was also affected by the structure of the sphingolipid (or that of an equivalent “saturated” phospholipid) component. Sterols had pronounced effects on domain formation by sphingomyelin and dipalmitoylphosphatidylcholine but only a weak influence on the ability of cerebrosides to form domains. Strikingly it was found that a small amount of ceramide (3 mol %) significantly stabilized domain/raft formation. The molecular basis for, and the implications of, the effects of different sterols and sphingolipids (especially ceramide) on the behavior and biological function of rafts are discussed.