The collective properties of the lipids that form biological membranes give rise to a very high level of lateral organization within the membranes. Lipid-driven membrane organization allows the segregation of membrane-associated components into specific lipid rafts, which function as dynamic platforms for signal transduction, protein processing, and membrane turnover. A number of events essential for the functional integrity of the nervous system occur in lipid rafts and depend on lipid raft organization. Alterations of lipid composition that lead to abnormal lipid raft organization and consequent deregulation of lipid raft-dependent signaling are often associated with neurodegenerative diseases. The amyloidogenic processing of proteins involved in the pathogenesis of major nervous system diseases, including Alzheimer's disease and Parkinson's disease, requires lipid raft-dependent compartmentalization at the membrane level. Improved understanding of the forces that control lipid raft organization will facilitate the development of novel strategies for the effective prevention and treatment of neurodegenerative and age-related brain diseases.