Butter and margarine primarily differ in the type of fat they are made from, as butter is made from animal fat and margarine is made from vegetable oil. This affects their texture, taste and nutrition.
Butter is made from milk or cream in a churning process that separates butterfat from buttermilk. Margarine is made from vegetable oil, water, salt and emulsifiers, although ingredients vary by brand. While butter contains cholesterol and saturated fat, margarine does not. However, margarine is higher in polyunsaturated and monosaturated fat and may contain trans fat. Butter also contains vitamins such as A, D, E and K. Both butter and margarine are required to have an 80 percent fat content.