A common feature of all eukaryotic membranes is the non-random distribution of different lipid species in the lipid bilayer (lipid asymmetry). Lipid asymmetry provides the two sides of the plasma membrane with different biophysical properties and influences numerous cellular functions. Alteration of lipid asymmetry plays a prominent role during cell fusion, activation of the coagulation cascade, and recognition and removal of apoptotic cell corpses by macrophages (programmed cell clearance). Here we discuss the origin and maintenance of phospholipid asymmetry, based on recent studies in mammalian systems as well as in Caenhorhabditis elegans and other model organisms, along with emerging evidence for a conserved role of mitochondria in the loss of lipid asymmetry during apoptosis. The functional significance of lipid asymmetry and its disruption during health and disease is also discussed.