Fas ligand (FasL), a member of the TNF protein family, potently induces cell death by activating its matching receptor Fas. Fas-mediated killing plays a critical role in naturally and pathologically occurring cell death, including development and homeostasis of the immune system. In addition to its receptor-interacting and cell death-inducing extracellular domain, FasL has a well-conserved intracellular portion with a proline-rich SH3 domain-binding site probably involved in non-apoptotic functions. We report here that, as with the Fas receptor, a fraction of FasL is constitutively localized in rafts. These dynamic membrane microdomains, enriched in sphingolipids and cholesterol, are important for cell signaling and trafficking processes. We show that FasL is partially localized in rafts and that increased amounts of FasL are found in rafts after efficient FasL/Fas receptor interactions. Raft disorganization after cholesterol oxidase treatment and deletions within the intracellular FasL domain diminish raft partitioning and, most important, lead to decreased FasL killing. We conclude that FasL is recruited into lipid rafts for maximum Fas receptor contact and cell death-inducing potency. These findings raise the possibility that certain pathologic conditions may be treated by altering the cell death-inducing capability of FasL with drugs affecting its raft localization.