Receptor clustering has been suggested as a crucial mechanism to initiate receptor signaling. Here we show that ceramide in sphingolipid-rich membrane rafts mediates clustering of CD95. Neutralization of surface ceramide or inhibition of its endogenous generation prevented CD95 clustering. Furthermore, application of ceramide at the cell surface triggered clustering of active but not inactive CD95. Apoptosis was inhibited by neutralization of surface ceramide or inhibition of ceramide release in vitro and in vivo. Thus, we conclude that surface ceramide mediates CD95 clustering, which is required for initiation of apoptosis, at least in some cell types.