Simple sphingolipids such as ceramide and sphingomyelin (SM) as well as more complex glycosphingolipids play very important roles in cell function under physiological conditions and during disease development and progression. Sphingolipids are particularly abundant in the nervous system. Due to their amphiphilic nature they localize to cellular membranes and many of their roles in health and disease result from membrane reorganization and from lipid interaction with proteins within cellular membranes. In this review we discuss some of the functions of sphingolipids in processes that entail cellular membranes and their role in neurodegenerative diseases, with an emphasis on SM, ceramide and gangliosides.