Sphingolipids, ceramides and cholesterol are integral components of cellular membranes, and they also play important roles in signal transduction by regulating the dynamics of membrane receptors through their effects on membrane fluidity. Here, we combined biochemical and functional assays with single-particle tracking analysis of diffusion in the plasma membrane to demonstrate that the local lipid environment regulates CXCR4 organization and function and modulates chemokine-triggered directed cell migration. Prolonged treatment of T cells with bacterial sphingomyelinase promoted the complete and sustained breakdown of sphingomyelins and the accumulation of the corresponding ceramides, which altered both membrane fluidity and CXCR4 nanoclustering and dynamics. Under these conditions CXCR4 retained some CXCL12-mediated signaling activity but failed to promote efficient directed cell migration. Our data underscore a critical role for the local lipid composition at the cell membrane in regulating the lateral mobility of chemokine receptors, and their ability to dynamically increase receptor density at the leading edge to promote efficient cell migration.