Free-standing giant unilamellar vesicles were used to visualize the complex lateral heterogeneity, induced by ceramide in the membrane bilayer at micron scale using C 12-NBD-PC probe partitioning under the fluorescence microscope. Ceramide gel domains exist as leaf-like structures in glycerophospholipid/ceramide mixtures. Cholesterol readily increases ceramide miscibility with glycerophospholipids but cholesterol–ceramide interactions are not involved in the organization of the liquid-ordered phase as exemplified by sphingomyelin/cholesterol mixtures. Sphingomyelin stabilizes the gel phase and thus decreases ceramide miscibility in the presence of cholesterol. Gel/liquid-ordered/liquid-disordered phase coexistence was visualized in quaternary phosphatidylcholine/sphingomyelin/ceramide/cholesterol mixtures as occurrence of dark leaf-like and circular domains within a bright liquid phase. Sphingomyelin initiates specific ceramide–sphingomyelin interactions to form a highly ordered gel phase appearing at temperatures higher than pure ceramide gel phase in phosphatidylcholine/ceramide mixtures. Less sphingomyelin is engaged in formation of liquid-ordered phase leading to a shift in its formation to lower temperatures. Sphingomyelinase activity on substrate vesicles destroys micron L o domains but induces the formation of a gel-like phase. The activation of phospholipase A 2 by ceramide on heterogeneous membranes was visualized. Changes in the phase state of the membrane bilayer initiates such morphological processes as membrane fragmentation, budding in and budding out was demonstrated.