Sterols have been identified as major components of membrane lipids that are part of specialized membrane domains necessary for organizing events such as polar protein targeting and signal transduction in plants, fungi and animals. However a common modification of sterols is the addition of sugar moieties via glycosylation abundantly found in plants. An exact physiological role for such diversification of sterols in plants is still unknown. Using reverse genetics and transcriptomics we show that UDP-glucose: sterol glucosyltransferase encoded by UGT80B1 is necessary for correct epidermal patterning in Arabidopsis root. Patterning of hair cells (trichoblasts) and non-hair cells (atrichoblasts) in the epidermis of the Arabidopsis root involves signaling through SCRAMBLED (SCM), a plasma membrane localized LRR-RL kinase. Feedback regulation via the transcriptional regulatory complex containing R2R3-MYB transcription factor WEREWOLF (WER) represses SCM and activates the homeodomain-leucine-zipper protein GLABRA2 (GL2) in atrichoblasts. Evidence suggests symplastic connections between cells, known as plasmodesmata, establish passage ways for single-repeat R3-MYB transcription factors to activate SCM expression in trichoblasts. Mutations in UGT80B1 cause atypical localization patterns of GL2, WER, and SCM in the root epidermis. The ugt80B1 formed fewer trichoblasts in comparison to wild-type. A translational fusion of UGT80B1 to GFP localizes to the ER, plasma membrane and to sites that appear to be plasmodesmata-associated desmotubules. Ultrastructural analysis revealed abnormalities in plasmodesmata formation and morphology in ugt80B1 mutants. Steryl glucoside profiling indicated deficiencies in specific glycosylated sterol compounds in roots. This study identifies UGT80B1 as a novel membrane component that is critical for plasmodesmata morphogenesis and cell-fate determination in the root epidermis. A model is proposed in which UGT80B1 activity provides spatially discreet sterol and steryl glucoside architecture within the plasma membrane to anchor the SCM receptor and within plasmosdesmata to facilitate intercellular movement of R3-MYB regulatory proteins underlying proper differentiation of trichoblasts versus atrichoblasts. Moreover, evidence from reverse genetics, proteomics and live cell imaging point to a actin dependent localization of UGT80B1 at the vesicle rich zone of root hair tip. This localization actively supports root hair elongation via tip growth, possibly by membrane modifications required for vesicle trafficking.