Ceramide, a bioactive lipid, has been extensively studied and identified as an essential bioactive molecule in mediating cellular signaling pathways. Sphingomyelinase (SMase), (EC 3.1.4.12) catalyzes the cleavage of the phosphodiester bond in sphingomyelin (SM) to form ceramide and phosphocholine. In mammals, three Mg(2+)-dependent neutral SMases termed nSMase1, nSMase2 and nSMase3 have been identified. Among the three enzymes, nSMase2 is the most studied and has been implicated in multiple physiological responses including cell growth arrest, apoptosis, development and inflammation. In this review, we summarize recent findings for the cloned nSMases and discuss the insights for their roles in regulation ceramide metabolism and cellular signaling pathway.