Protein phosphatase 2C⑀ (PP2C⑀), a mammalian PP2C family member, is expressed in various tissues and is implicated in the negative regulation of stress-activated protein kinase pathways. We show that PP2C⑀ is an endoplasmic reticulum (ER) transmembrane protein with a transmembrane domain at the amino terminus and the catalytic domain facing the cytoplasm. Yeast two-hybrid screening of a human brain library using PP2C⑀ as bait resulted in the isolation of a cDNA that encoded vesicle-associated membrane protein-associated protein A (VAPA). VAPA is an ER resident integral membrane protein involved in recruiting lipidbinding proteins such as the ceramide transport protein CERT to the ER membrane. Expression of PP2C⑀ resulted in dephosphorylation of CERT in a VAPA expression-dependent manner, which was accompanied by redistribution of CERT from the cytoplasm to the Golgi apparatus. The expression of PP2C⑀ also enhanced the association between CERT and VAPA. In addition, knockdown of PP2C⑀ expression by short interference RNA attenuated the interaction between CERT and VAPA and the sphingomyelin synthesis. These results suggest that CERT is a physiological substrate of PP2C⑀ and that dephosphorylation of CERT by PP2C⑀ may play an important role in the regulation of ceramide trafficking from the ER to the Golgi apparatus.Vesicle-associated membrane protein-associated protein A (VAPA) 3 is an endoplasmic reticulum (ER)-resident type II transmembrane protein with homologs widely distributed from yeast to human (1-3). Recently, evidence has accumulated that in mammalian cells VAPA participates in the regulation of inter-organelle transport of membrane lipids by recruiting lipid transfer proteins to the ER membrane. VAPA associates with a short, conserved peptide sequence termed the "two phenylalanines in an acidic tract" (FFAT) motif that is found in several lipid transfer proteins including ceramide transport protein CERT, oxysterol-binding protein, Opi1 protein, and PITP/Nir/ rdgB families (4 -11). VAPA is composed of two conserved domains, an amino-terminal immunoglobulin-like  sheet responsible for FFAT motif binding and a carboxyl-terminal transmembrane domain (8). In addition to its role in recruiting FFAT motif-targeted proteins to ER membranes, VAPA has been proposed to function in vesicle trafficking (1,(12)(13)(14), in the organization of the microtubule network (10, 15), and in the replication of hepatitis C virus RNA (16,17). In mammalian cells ceramide is synthesized in the ER and transported to the Golgi apparatus where it is converted to sphingomyelin (SM). The ceramide transport protein CERT plays a key role in the ER-to-Golgi trafficking of ceramide (18 -20). CERT consists of several distinct domains including a Steroidogenic acute regulator-related lipid transfer (START) domain capable of specifically extracting ceramide from membrane, a pleckstrin homology (PH) domain that serves to target the Golgi apparatus by recognizing phosphatidylinositol 4-monphophatate, and a FFAT motif, which interacts with VA...