We have characterized and compared the structures of ergosterol- and cholesterol-containing 1-palmitoyl-2-oleoyl-sn-glycero-3-phosphocholine (POPC) membranes before and after interaction with the amphiphilic antifungal drug amphotericin B (AmB) using neutron reflection. AmB inserts into both pure POPC and sterol-containing membranes in the lipid chain region and does not significantly perturb the structure of pure POPC membranes. By selective per-deuteration of the lipids/sterols, we show that AmB extracts ergosterol but not cholesterol from the bilayers and inserts to a much higher degree in the cholesterol-containing membranes. Ergosterol extraction by AmB is accompanied by membrane thinning. Our results provide new insights into the mechanism and antifungal effect of AmB in these simple models of fungal and mammalian membranes and help understand the molecular origin of its selectivity and toxic side effects.