We have shown that deficiency of neutral sphingomyelinase 2 (nSMase2), an enzyme generating the sphingolipid ceramide, improves memory in adult mice. Here, we performed sphingolipid and RNA-seq analyses on the cortex from 10 month-old nSMase2-deficient (fro/fro) and heterozygous (+/fro) mice. fro/fro cortex showed reduced levels of ceramide, particularly in astrocytes. Differentially abundant transcripts included several functionally related groups, with decreases in mitochondrial oxidative phosphorylation and astrocyte activation transcripts, while axon guidance and synaptic transmission transcripts were increased, indicating a role of nSMase2 in oxidative stress, astrocyte activation, and cognition. Experimentally induced oxidative stress decreased the level of glutathione (GSH), an endogenous inhibitor of nSMase2, and increased immunolabeling for ceramide in primary +/fro astrocytes, but not in fro/fro astrocytes. β-galactosidase activity was lower in 5-weeks old fro/fro astrocytes, indicating delayed senescence due to nSMase2 deficiency. In fro/fro cortex, levels of the senescence markers C3b and p27, and the proinflammatory cytokines interleukin 1β, interleukin 6, and tumor necrosis factor α were reduced, concurrent with 2-fold decreased phosphorylation of their downstream target, protein kinase Stat3. RNA and protein levels of the ionotropic glutamate receptor subunit 2b (Grin2b or NR2B) were increased by 2-fold, an effect known to enhance cognition. This was consistent with 3.5-fold reduced levels of exosomes carrying miR-223-3p, a micro-RNA downregulating Grin2b. In summary, our data show that nSMase2 deficiency prevents oxidative stress-induced elevation of ceramide and secretion of exosomes by astrocytes that suppress neuronal function, indicating a role of nSMase2 in the regulation of neuroinflammation and cognition during brain aging.Significance statementOxidative stress is associated with brain aging and cognitive decline. The underlying mechanism how oxidative stress impairs brain function is still not clear. We provide evidence that oxidative stress increases ceramide in astrocytes, which is prevented by deficiency of nSMase2, an enzyme that is activated by oxidative stress and generates ceramide from sphingomyelin. Mass spectrometric and transciptomic (RNA-seq) analyses show that in middle aged (10-month old) mouse cortex, nSMase2 deficiency reduces ceramide and increases expression of genes important for synaptic transmission and cognition. Therefore, our data show that oxidative stress-induced activation of nSMase2 and generation of ceramide is significant for cognitive decline during aging.