Cholesterol/sphingolipid microdomains (lipid rafts) in the membrane are involved in protein trafficking, formation of signaling complexes, and regulation of actin cytoskeleton. Here, we show that lipid rafts exist abundantly in dendrites of cultured hippocampal neurons, in which they are associated with several postsynaptic proteins including surface AMPA receptors. Depletion of cholesterol/sphingolipid leads to instability of surface AMPA receptors and gradual loss of synapses (both inhibitory and excitatory) and dendritic spines. The remaining synapses and spines in raft-depleted neurons become greatly enlarged. The importance of lipid rafts for normal synapse density and morphology could explain why cholesterol promotes synapse maturation in retinal ganglion cells and offers a potential link between disordered cholesterol metabolism and the synapse loss seen in neurodegenerative disease.