Ceramide synthases (CerS) catalyze ceramide formation via N‐acylation of a sphingoid base with a fatty acyl‐CoA and are attractive drug targets for treating numerous metabolic diseases and cancers. Here, we present the cryo‐EM structure of a yeast CerS complex, consisting of a catalytic Lac1 subunit and a regulatory Lip1 subunit, in complex with C26‐CoA substrate. The CerS holoenzyme exists as a dimer of Lac1‐Lip1 heterodimers. Lac1 contains a hydrophilic reaction chamber and a hydrophobic tunnel for binding the CoA moiety and C26‐acyl chain of C26‐CoA, respectively. Lip1 interacts with both the transmembrane region and the last luminal loop of Lac1 to maintain the proper acyl chain binding tunnel. A lateral opening on Lac1 serves as a potential entrance for the sphingoid base substrate. Our findings provide a template for understanding the working mechanism of eukaryotic ceramide synthases and may facilitate the development of therapeutic CerS modulators. Synopsis: In eukaryotes, ceramide synthase is a multispan enzyme in the endoplasmic reticulum membrane. Here, structural and biochemical studies of the yeast Lac1‐Lip1 complex provide new insight into its substrate binding and molecular mechanism. The cryo‐EM structure of the yeast Lac1‐Lip1 complex bound to C26‐CoA substrate reveals that the holoenzyme exists as a dimer of heterodimers.Lac1 contains a hydrophilic reaction chamber and a hydrophobic tunnel that bind the CoA moiety and C26‐acyl chain of C26‐CoA, respectively.Lip1 interacts with both the transmembrane region and the last luminal loop of Lac1 to maintain the acyl chain binding tunnel.A lateral opening in the membrane‐embedded region of Lac1 serves as a potential entry site for the sphingoid base substrate. [ABSTRACT FROM AUTHOR]