A major lipid-signaling pathway in mammalian cells implicates the generation of ceramide from the ubiquitous sphingolipid sphingomyelin (SM). Hydrolysis of SM by a sphingomyelinase present in acidic compartments has been reported to mediate, via the production of ceramide, the apoptotic cell death triggered by stress-inducing agents. In the present study, we investigated whether the ceramide formed within or accumulated in lysosomes indeed triggers apoptosis. A series of observations strongly suggests that ceramide involved in stress-induced apoptosis is not endolysosomal: 1) Although short-chain ceramides induced apoptosis, loading cells with natural ceramide through receptor-mediated endocytosis did not result in cell death. 2) Neither TNF-alpha nor anti-CD95 induced the degradation to ceramide of a natural SM that had been first introduced selectively into acidic compartments. 3) Stimulation of SV40-transformed fibroblasts by TNF-alpha or CD40 ligand resulted in apoptosis equally well in cells derived from control individuals and from patients affected with Farber disease, having a genetic defect of acid ceramidase activity leading to lysosomal accumulation of ceramide. Also, induction of apoptosis using anti-CD95 (Fas) or anti-CD40 antibodies, TNF-alpha, daunorubicin, and ionizing radiation was similar in control and Farber disease lymphoid cells. In all cases, apoptosis was preceded by a comparable increase of intracellular ceramide levels. 4) Retroviral-mediated gene transfer and overexpression of acid ceramidase in Farber fibroblasts, which led to complete metabolic correction of the ceramide catabolic defect, did not affect the cell response to TNF-alpha and CD40 ligand.