Cell membranes display a tremendous complexity of lipids and proteins designed to perform the functions cells require. To coordinate these functions, the membrane is able to laterally segregate its constituents. This capability is based on dynamic liquid-liquid immiscibility and underlies the raft concept of membrane subcompartmentalization. Lipid rafts are fluctuating nanoscale assemblies of sphingolipid, cholesterol, and proteins that can be stabilized to coalesce, forming platforms that function in membrane signaling and trafficking. Here we review the evidence for how this principle combines the potential for sphingolipid-cholesterol self-assembly with protein specificity to selectively focus membrane bioactivity.