Sphingolipids are involved in cell differentiation and morphogenesis in eukaryotic cells. In this study, YlLac1p, a ceramide synthase required for glucosylceramide (GlcCer) synthesis, was found to be essential for hyphal growth in Yarrowia lipolytica. Y. lipolytica GlcCer was shown to be composed of a C16:0 fatty acid, which is hydroxylated at C2, and a C18:2 long chain base, which is unsaturated at both C4 and C8 and methylated at C9. Domain swapping analysis revealed that the entire TRAM/Lag1/CLN8 (TLC) domain, not the Lag1 motif, is crucial for the function of YlLac1p. YlDes1p, the C4 desaturase of the ceramide synthesized by YlLac1p, was also required for Y. lipolytica morphogenesis. Both Yllac1Δ and Yldes1Δ mutants neither polarize lipid rafts nor form normal vacuoles. Interestingly, mutation in YlPEX5, which encode a peroxisomal targeting signal receptor, partially suppressed the defective hyphal growth of Yllac1Δ. The Yllac1ΔYlpex5Δ mutant restored the ability to polarize lipid rafts and to form normal vacuoles, although it could not synthesize GlcCer. Taken together, our results suggest that GlcCer or GlcCer derivatives may be involved in hyphal morphogenesis in Y. lipolytica, at least in part, by affecting polarization of lipid rafts and vacuole morphogenesis.