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Sphingolipids function as membrane constituents and signaling molecules, with crucial roles in human diseases, from neurodevelopmental disorders to cancer, best exemplified in the inborn errors of sphingolipid metabolism in lysosomes. The dihydroceramide desaturase Δ4-dihydroceramide desaturase 1 (DEGS1) acts in the last step of a sector of the sphingolipid pathway, de novo ceramide biosynthesis. Defects in DEGS1 cause the recently described hypomyelinating leukodystrophy-18 (HLD18) (OMIM #618404). Here, we reveal that DEGS1 is a mitochondria-associated endoplasmic reticulum membrane–resident (MAM-resident) enzyme, refining previous reports locating DEGS1 at the endoplasmic reticulum only. Using patient fibroblasts, multiomics, and enzymatic assays, we show that DEGS1 deficiency disrupts the main core functions of the MAM: (a) mitochondrial dynamics, with a hyperfused mitochondrial network associated with decreased activation of dynamin-related protein 1; (b) cholesterol metabolism, with impaired sterol O-acyltransferase activity and decreased cholesteryl esters; (c) phospholipid metabolism, with increased phosphatidic acid and phosphatidylserine and decreased phosphatidylethanolamine; and (d) biogenesis of lipid droplets, with increased size and numbers. Moreover, we detected increased mitochondrial superoxide species production in fibroblasts and mitochondrial respiration impairment in patient muscle biopsy tissues. Our findings shed light on the pathophysiology of HLD18 and broaden our understanding of the role of sphingolipid metabolism in MAM function.