Eukaryotic flagella and cilia are surrounded by a membrane that is continuous with, but distinct from, the rest of the plasma membrane. In Leishmania parasites, the inner leaflet of the flagellar membrane is coated with the acylated membrane protein, SMP-1. Here, we provide evidence that SMP-1 stabilizes the flagellar membrane and is required for flagella elongation and function. The expression and flagella targeting of SMP-1 is tightly associated with flagella elongation during amastigote to promastigote differentiation. Deletion of the genes encoding SMP-1 and the flagellar pocket protein SMP-2, led to the production of short flagella and defects in motility. Alterations in the physical properties of the smp-1/smp-2(-/-) flagellar membrane were suggested by: (1) the accumulation of membrane vesicles in the flagellar matrix, and (2) further retraction of flagella following partial inhibition of sterol and sphingolipid biosynthesis. The flagella phenotype of the smp-1/smp-2(-/-) null mutant was reversed by re-expression of SMP-1, but not SMP-2. SMP-1 contains a jelly-roll beta-sheet structure that is probably conserved in all SMP proteins, and forms stable homo-oligomers in vivo. We propose that the SMP-1 coat generates and/or stabilizes sterol- and sphingolipid-rich domains in the flagellar membrane.