Sphingolipid metabolites participate in key events of signal transduction and cell regulation. In the sphingomyelin cycle, a number of extracellular agents and insults (such as tumor necrosis factor, Fas ligands, and chemotherapeutic agents) cause the activation of sphingomyelinases, which act on membrane sphingomyelin and release ceramide. Multiple experimental approaches suggest an important role for ceramide in regulating such diverse responses as cell cycle arrest, apoptosis, and cell senescence. In vitro, ceramide activates a serine-threonine protein phosphatase, and in cells it regulates protein phosphorylation as well as multiple downstream targets [such as interleukin converting enzyme (ICE)-like proteases, stress-activated protein kinases, and the retinoblastoma gene product] that mediate its distinct cellular effects. This spectrum of inducers of ceramide accumulation and the nature of ceramide-mediated responses suggest that ceramide is a key component of intracellular stress response pathways.