Long-chain saturated ceramides possess the ability to form gel domains in fluid bilayer membranes. Such domains may also contain sphingomyelin, but generally exclude cholesterol. We studied the effect of N-acyl chain methylations on the ability of ceramide to form ceramide- and sphingomyelin-containing gel domains that displace sterol. Fluorescence quenching of probes displaying different lateral partitioning in heterogeneous lipid bilayers showed that the methyl branches induced position-dependent changes in the lateral distribution of the ceramides. Distally monomethylated ceramides interacted with sphingomyelin and displaced sterol, whereas proximally monomethylated and polymethylated ceramides appeared to be located outside of sterol/sphingomyelin-enriched domains. The branched ceramides also markedly reduced the bilayer affinity for sterol as determined from the equilibrium partitioning of sterol between lipid vesicles and cyclodextrin. Altogether, alterations in intermolecular interactions induced by the methyl branches markedly affected the molecular properties of ceramide in artificial bilayers.