SM is a fundamental component of mammalian cell membranes that contributes to mechanical stability, signaling, and sorting. Its production involves the transfer of phosphocholine from phosphatidylcholine onto ceramide, a reaction catalyzed by SM synthase (SMS)1 in the Golgi and SMS2 at the plasma membrane. Mammalian cells also synthesize trace amounts of the SM analog, ceramide phosphoethanolamine (CPE), but the physiological relevance of CPE production is unclear. Previous work revealed that SMS2 is a bifunctional enzyme producing both SM and CPE, whereas a closely related enzyme, SMS-related protein (SMSr)/SAMD8, acts as a monofunctional CPE synthase in the endoplasmic reticulum. Using domain swapping and site-directed mutagenesis on enzymes expressed in defined lipid environments, we here identified structural determinants that mediate the head group selectivity of SMS family members. Notably, a single residue adjacent to the catalytic histidine in the third exoplasmic loop profoundly influenced enzyme specificity, with Glu permitting SMS-catalyzed CPE production and Asp confining the enzyme to produce SM. An exchange of exoplasmic residues with SMSr proved sufficient to convert SMS1 into a bulk CPE synthase. This allowed us to establish mammalian cells that produce CPE rather than SM as the principal phosphosphingolipid and provide a model of the molecular interactions that impart catalytic specificity among SMS enzymes.