Over the last 50 years or so, amphotericin has been widely employed in treating life-threatening systemic fungal infections. Its usefulness in the clinic, however, has always been circumscribed by its dose-limiting side-effects, and it is also now compromised by an increasing incidence of pathogen resistance. Combating these problems through development of new anti-fungal agents requires detailed knowledge of the drug's molecular mechanism, but unfortunately this is far from clear. Neutron diffraction studies of the drug's incorporation within lipid-sterol membranes have here been performed to shed light on this problem. The drug is shown to disturb the structures of both fungal and mammalian membranes, and co-localises with the membrane sterols in a manner consistent with trans-membrane pore formation. The differences seen in the membrane lipid ordering and in the distributions of the drug-ergosterol and drug-cholesterol complexes within the membranes are consistent with the drug's selectivity for fungal vs. human cells.