Recent investigations have identified a signaltransduction system involving sphingomyelin and derivatives. In this paradigm, sphingomyelin hydrolysis by a sphingomyelinase generates ceramide, which may be converted to the protein kinase C inhibitor sphingosine or to ceramide 1-phosphate. Ceramide may have second-messenger function because it induces epidermal growth factor receptor phosphorylation, presumably on Thr-669 in A-431 cells. The present studies describe a kinase that may mediate ceramide action. With a 19-amino acid epidermal growth factor receptor peptide containing Thr-669, a membrane-bound activity that phosphorylated the peptide was detected in A-431 cells. Activity was linearly related to ATP (0.3-300 ,uM) and peptide concentration (0.02-1 mg/ml), possessed a physiologic pH optimum (pH 7.0-7.4), and was Mg2+-dependent. Other cations-Ca ", Mn2+, and Zn2+-were ineffective. Natural and synthetic ceramide induced time-and concentration-dependent enhancement of kinase activity. Ceramide (0.5 ,uM) increased kinase activity 2-fold by 30 s, and activity remained elevated for at least 15 min. As little as 0.001 ,LM ceramide was effective, and 1 ,LM ceramide induced maximal phosphorylation. Sphingosine was similarly effective. Because tumor necrosis factor (TNF) a rapidly induces sphingomyelin hydrolysis to ceramide during monocytic differentiation of HL-60 cells, its effects on kinase activity were assessed. Kinase activity was increased 1.5-fold at 5 min and 2-fold at 2 hr in membranes derived from TNF-stimulated cells. The effective concentration range was 3 pM-30 nM TNF. Exogenous ceramide induced a similar effect. In sum, these studies demonstrate the existence of an unusual Mg2+-dependent ceramide-activated protein kinase that may mediate some aspects of TNF-a function.Recent investigations from this and other laboratories have identified a metabolic pathway involving sphingomyelin and derivatives that may be involved in signal transduction (1-8). This pathway is initiated by hydrolysis of sphingomyelin to ceramide via the action of a sphingomyelinase. Ceramide may then be deacylated to sphingoid bases, putative inhibitors of protein kinase C (9-12), or phosphorylated to the sphingolipid ceramide 1-phosphate by the action of a recently described calcium-dependent ceramide kinase (4, 5, 13). The biologic role of ceramide 1-phosphate and regulation of the kinase that mediates its synthesis have not yet been determined. This pathway appears specific for ceramide derived from sphingomyelin, as ceramide derived from glycosphingolipids is not converted either to sphingoid bases (14) or to ceramide 1-phosphate (4).Recently, Hannun and coworkers (6-8) have provided evidence that this sphingomyelin pathway may be involved in signal transduction. Tumor necrosis factor (TNF) a, y interferon, and 1,25-dihydroxyvitamin D3, factors that induce monocytic differentiation of HL-60 promyelocytic cells, all stimulate sphingomyelin degradation to ceramide as an early event in cellular activation (6-8). Further,...