Sulfatide is an acidic glycolipid composed of a carbohydrate moiety, a galactose residue with a sulfate group attached at the C3 position, and a lipid moiety, ceramide, which consists of various long-chain bases and fatty acids. The carbohydrate moiety of sulfatide is biosynthesized through sequential reactions catalyzed by ceramide galactosyltransferase (CGT) and cerebroside sulfotransferase (CST). The physiological functions of sulfatide have been elucidated using both global constitutive and conditional CST-knockout mice. Sulfatide is essential for forming the axo-glial junction between the myelin loop and axolemma in the paranodal region. It appears to play a more critical role in the maintenance of myelin than in its development. Adult-onset sulfatide depletion leads to disruption of axo-glial junctions independent of myelin loss, which mirrors the prodromal stage of multiple sclerosis. Additionally, sulfatide is crucial for the tightly regulated terminal differentiation of oligodendrocytes. In the immune system, type II NKT cells recognize mammalian glycolipid antigens, including sulfatides. Sulfatide-stimulated type II NKT cells play immunosuppressive roles in autoimmune encephalomyelitis, inflammatory liver disease, type 1 diabetes, and asthma. Sulfatide is also required for phagosome formation in macrophages, mediated by the natural killer receptor member Ly49Q. Finally, unique hydroxylated sulfatide species (t18:0-C22:0 h and t18:0-C24:0 h) in intercalated cells along the kidney collecting duct, where ammonia is excreted by the Rhesus C glycoprotein (Rhcg), are involved in ammonium excretion into the urine. Thus, sulfatide is a multifunctional molecule whose molecular behavior depends on the context.