Considerable evidence shows that lateral inhomogeneities in lipid composition and physical properties exist in biological membranes. These membrane lipid domains are proposed to play important roles in processes such as signal transduction and membrane traffic. However, there is not at present an adequate description of the nature of these lipid domains in terms of their size, abundance, composition, or dynamics. We discuss the current analyses of the properties and function of membrane domains in cells and compare their properties with chemically simpler model membrane systems that can be understood in greater detail.