Sphingomyelin (SM) is a vital component of mammalian membranes, providing mechanical stability and a structural framework for plasma membrane organization. Its production involves the transfer of phosphocholine from phosphatidylcholine onto ceramide, a reaction catalyzed by SM synthase in the Golgi lumen. Drosophila lacks SM and instead synthesizes the SM analogue ceramide phosphoethanolamine (CPE) as the principal membrane sphingolipid. The corresponding CPE synthase shares mechanistic features with enzymes mediating phospholipid biosynthesis via the Kennedy pathway. Using a functional cloning strategy, we here identified a CDP-ethanolamine:ceramide ethanolamine phosphotransferase as the enzyme responsible for CPE production in Drosophila. CPE synthase constitutes a new branch within the CDP-alcohol phosphotransferase superfamily with homologues in Arthropoda (insects, spiders, mites, scorpions), Cnidaria (Hydra, sea anemones), and Mollusca (oysters) but not in most other animal phyla. The enzyme resides in the Golgi complex with its active site facing the lumen, contrary to the membrane topology of other CDP-alcohol phosphotransferases. Our findings open up an important new avenue to address the biological role of CPE, an enigmatic membrane constituent of a wide variety of invertebrate and marine organisms.