Clustering seems to be employed by many receptors for transmembrane signaling. Here, we show that acid sphingomyelinase (ASM)-released ceramide is essential for clustering of CD95. In vitro and in vivo, extracellularly orientated ceramide, released upon CD95-triggered translocation of ASM to the plasma membrane outer surface, enabled clustering of CD95 in sphingolipid-rich membrane rafts and apoptosis induction. Whereas ASM deficiency, destruction of rafts, or neutralization of surface ceramide prevented CD95 clustering and apoptosis, natural ceramide only rescued ASM-deficient cells. The data suggest CD95-mediated clustering by ceramide is prerequisite for signaling and death.