Lignin is a complex and irregular biopolymer of crosslinked phenylpropanoid units in plant secondary cell walls. Its biosynthesis requires three endoplasmic reticulum (ER)-resident cytochrome P450 monooxygenases, C4H, C3'H and F5H, to establish the structural characteristics of its monomeric precursors. These P450 enzymes were reported to associate with each other or potentially with other soluble monolignol biosynthetic enzymes to form an enzyme complex or a metabolon. However, the molecular basis governing such enzyme or pathway organization remains elusive. Here, we show that Arabidopsis membrane steroid-binding proteins (MSBPs) serve as a scaffold to physically organize monolignol P450 monooxygenases, thereby regulating the lignin biosynthetic process. We find that although C4H, C3'H and F5H are in spatial proximity to each other on the ER membrane in vivo, they do not appear to directly interact with each other. Instead, two MSBP proteins physically interact with all three P450 enzymes and, moreover, MSBPs themselves associate as homomers and heteromers on the ER membrane, thereby organizing P450 clusters. Downregulation of MSBP genes does not affect the transcription levels of monolignol biosynthetic P450 genes but substantially impairs the stability and activity of the MSBP-interacting P450 enzymes and, consequently, lignin deposition, and the accumulation of soluble phenolics in the monolignol branch but not in the flavonoid pathway. Our study suggests that MSBP proteins are essential structural components in the ER membrane that physically organize and stabilize the monolignol biosynthetic P450 enzyme complex, thereby specifically controlling phenylpropanoid-monolignol branch biosynthesis.