Ergosterol, found in fungi and some protist membranes, is understudied compared with cholesterol from animal membranes. Generally, ergosterol is assumed to modulate membranes in the same manner as cholesterol, based on their similar chemical structures. Here we reveal some fundamental structural and dynamical differences between them. Neutron diffraction shows that ergosterol is embedded in the lipid bilayer much shallower than cholesterol. Ergosterol does not change the membrane thickness as much as cholesterol does, indicating little condensation effect. Neutron spin echo shows that ergosterol can rigidify and soften membranes at different concentrations. The lateral lipid diffusion measured by quasielastic neutron scattering indicates that ergosterol promotes a jump diffusion of the lipid, whereas cholesterol keeps the same continuous lateral diffusion as the pure lipid membrane. Our results point to quite distinct interactions of ergosterol with membranes compared with cholesterol. These insights provide a basic understanding of membranes containing ergosterol with implications for phenomena such as lipid rafts and drug interactions.