Chen et al. report that the lipid ceramide inverts the membrane orientation of the endoplasmic reticulum (ER) transmembrane protein TM4SF20, thereby changing its function. Without ceramide, the amino terminus of TM4SF20 was exposed to the ER lumen, and insertion in this orientation required the first TM4SF20 transmembrane helix and TRAM2 (translocating chain-associated membrane protein 2). Ceramide altered the direction through which transmembrane helices are inserted into the ER during translation and the amino terminus became cytosolic. As opposite-orientation insertion was induced by TRAM2 knockdown, the authors propose that ceramide may induce such an orientation switch by blocking TRAM2–TM4SF20 interactions. In the amino terminus cytosol-facing orientation, TM4SF20 promotes the cleavage of the membrane-bound precursor of CREB3L1 (a transcription factor that inhibits the cell cycle and promotes collagen synthesis) rather than inhibiting it, thus enabling CREB3L1 to enter the nucleus.