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.