Type A and B Niemann Pick (NPD) is an inherited multisystem lysosomal storage disorder caused by mutations in the SMPD1 gene. Respiratory dysfunction is a key hallmark of NPD, although the precise mechanisms underlying these pathologies is underexplored. Here we present a Drosophila model of Smpd1 loss-of-function that displays significant respiratory defects. Smpd1 is expressed in the late-embryonic fly respiratory network, the trachea, and is secreted into the tracheal lumen. Loss of Smpd1 results in embryonic lethality, and although tracheal morphology appears normal, trachea fail to fill with gas prior to eclosion. We demonstrate that clearance of luminal constituents through endocytosis prior to gas-filling is defective in Smpd1 mutants. This is coincident with autophagic, but not lysosomal defects. Finally, we show that although bulk sphingolipids are unchanged, dietary loss of lipids in combination with genetic and pharmacological block of ceramide synthesis is sufficient to rescue gas-filling defects. In summary, we present a novel NPD model amenable to genetic and pharmacological screens, and highlight myriocin, an inhibitor of ceramide synthesis, as a potential therapeutic drug for the treatment of NPD.