Lactosylceramide (LacCer) is a member of the glycosphingolipid family which has been recently recognized as a signaling intermediate in the regulation of cell proliferation and cell adhesion. In this paper, we present our studies pointing to a potential role of LacCer in inducing apoptosis. In our studies we employed a human osteosarcoma cell line MG-63 (wild type, WT) and a neutral sphingomyelinase (N-SMase) deficient cell line CC derived from MG-63 (mutant) cells. We observed that WT cells were highly sensitive to tumor necrosis factor-alpha (TNF-alpha), ceramide and LacCer-induced apoptosis. In contrast, the mutant cells were insensitive to TNF-alpha-induced apoptosis as they did not generate ceramide and LacCer. However, the exogenous supply of ceramide and/or LacCer rendered the mutant cells apoptotic. Interestingly, preincubation of cells with D-threo-1-phenyl-2-decanoylamino-3-morpholino-1-propanol (D-PDMP), an inhibitor of glucosylceramide synthase and lactosylceramide synthase, abrogated ceramide-induced apoptosis but not LacCer-induced apoptosis in both WT cells and the mutant cells. Moreover, TNF-alpha and LacCer-induced apoptosis required the generation of reactive oxygen species (ROS) in WT cells. However, since mutant cells did not produce significant amounts of LacCer and ROS in response to TNF-alpha treatment they are insensitive to TNF-alpha-induced apoptosis. In summary, our studies suggest that TNF-alpha-induced N-SMase activation and production of ceramide is required to activate the apoptosis pathway in human osteosarcoma cells. But it is not sufficient to induce apoptosis. Rather, the conversion of ceramide to LacCer and ROS generation are critical for apoptosis.