Group IVA cytosolic phospholipase A₂ (cPLA₂α), which harbors an N-terminal lipid binding C2 domain and a C-terminal lipase domain, produces arachidonic acid from the sn-2 position of zwitterionic lipids such as phosphatidylcholine. The C2 domain has been shown to bind zwitterionic lipids, but more recently, the anionic phosphomonoester sphingolipid metabolite ceramide-1-phosphate (C1P) has emerged as a potent bioactive lipid with high affinity for a cationic patch in the C2 domain β-groove. To systematically analyze the role that C1P plays in promoting the binding of cPLA₂α-C2 to biological membranes, we employed biophysical measurements and cellular translocation studies along with mutagenesis. Biophysical and cellular translocation studies demonstrate that C1P specificity is mediated by Arg⁵⁹, Arg⁶¹, and His⁶² (an RxRH sequence) in the C2 domain. Computational studies using molecular dynamics simulations confirm the origin of C1P specificity, which results in a spatial shift of the C2 domain upon membrane docking to coordinate the small C1P headgroup. Additionally, the hydroxyl group on the sphingosine backbone plays an important role in the interaction with the C2 domain, further demonstrating the selectivity of the C2 domain for C1P over phosphatidic acid. Taken together, this is the first study demonstrating the molecular origin of C1P recognition.