Our view of biological membranes has evolved dramatically over the last few decades. In the bilayer model from Singer & Nicholson (Science 1972;175:720-731), both proteins and lipids freely diffuse within the plane of the membrane. Currently, however, membranes are viewed as a mosaic of different compartments or domains maintained by an active cytoskeleton network (Ritchie et al. Mol Membr Biol 2003; 20:13-18). Due to interactions between membrane components, several types of subdomains can form with different characteristics and functions. Lipids are likely to play an important role in the formation of so-called lipid-enriched microdomains or lipid rafts, adding another order of complexity to the membrane model. Rafts represent a type of domain wherein lipids of specific chemistry may dynamically associate with each other, to form platforms important for membrane protein sorting and construction of signaling complexes (Simons & Toomre. Nat Rev Mol Cell Biol 2000;1:31-39). Currently, there are several hypotheses concerning the nature of rafts (reviewed in (Edidin. Annu Rev Biophys Biomol Struct 2003;32: 257-283; Zurzolo et al. EMBO Rep 2003;4:1117-1121)). The most commonly cited one, proposed by Kai Simons (Simons & Ikonen. Nature 1997;387:569-572; Pralle et al. J Cell Biol 2000;148:997-1008), suggests that rafts are relatively small structures ( approximately 50 nm) enriched in cholesterol and sphingolipids within which associated proteins are likely to be concentrated. Another proposal (Anderson & Jacobson. Science 2002;296:1821-1825) suggests that rafts are constructed of lipid shells. These are small dynamic assemblies wherein 'raft' proteins are preferentially associated with certain types of lipids. These 'shells' are thermodynamically stable mobile entities in the plane of the membrane that are able to target the protein they encase to preexisting rafts/caveolae domains. In this review we summarize the data suggesting a specific role for lipid domains in intracellular trafficking and sorting and present a modification of the raft model that may help explain the observed phenomena.