Lipids were long considered to be passive passengers of carrier vesicles with the single role of sealing the transport container. We now know that specific phospholipids are required for efficient fusion, while others facilitate budding and fission. Moreover, the various polyphosphoinositides assist in the recruitment from the cytosol of proteins of the transport machinery. Finally, the segregation of membrane lipids into different fluid phases appears to serve as a 'lipid raft' mechanism for protein sorting at various stages of the secretory and endocytic pathways. The current challenge is to understand how proteins control the metabolism and subcellular localization, and thereby the activity, of the various lipids.