Macrophage acyl-CoA:cholesterol O-acyltransferase (ACAT), a key enzyme in atheroma foam cell formation, is stimulated by lipoproteins only after a "threshold" amount of cholesterol has accumulated in the cell. The present study explores the hypothesis that cellular sphingomyelin, by increasing the capacity of the cell to accommodate excess cholesterol, can influence the threshold of ACAT stimulation by lipoproteins. When the sphingomyelin content of macrophages was increased by either incubation with exogenous sphingomyelin or ceramide (a stimulator of endogenous sphingomyelin synthesis), the ability of acetyl-LDL to stimulate whole-cell ACAT activity was substantially reduced despite similar lipoprotein uptake and total cholesterol accumulation as in control cells. When the sphingomyelin content of macrophages was decreased by sphingomyelinase treatment, the ability of acetyl-LDL to stimulate whole-cell ACAT activity was enhanced despite no change in lipoprotein uptake. Importantly, microsomes isolated from control, sphingomyelin-, or sphingomyelinase-treated macrophages showed no difference in ACAT activity when assayed in vitro in the presence of exogenous cholesterol, suggesting that these treatments affected cholesterol trafficking. Lastly, a corollary of the hypothesis, that cells might adapt to a large increase in free cholesterol by increasing their sphingomyelin content, was supported by showing that the sphingomyelin content of macrophages increased 2.6-fold when the cells were induced to accumulate free cholesterol by incubation with acetyl-LDL plus an ACAT inhibitor. Thus, the sphingomyelin content of macrophages can influence the threshold at which ACAT is stimulated by lipoprotein delivery of cholesterol, and the cholesterol content of macrophages can influence the sphingomyelin content of the cell. These findings are consistent with a model in which cellular sphingomyelin plays an important role in accommodating pools of cellular cholesterol that result from the uptake of atherogenic lipoproteins by macrophages.