The effect of BFA on the metabolic processing and intracellular traffic of gangliosides was studied in cerebellar granule cells, fed in culture for different periods with radiolabeled ganglioside GM1. The following results were obtained: (a) degradation of taken-up GM1 was markedly inhibited by BFA; this effect was rapid, reversible, and affected by reduced temperature, ATP depletion, and microtubule disruption: (b) direct glycosylation of internalized GM1 to GD1a was completely blocked by BFA; (c) the portion of GM1 that escaped BFA inhibition was degraded with formation of sphingosine, that was recycled for the biosynthesis of less glycosylated glycolipids (glucosyl-ceramide, GM3 and GD3); (d) in BFA-treated cells highly glycosylated gangliosides were undetectable, and the formation of sphingomyelin from liberated sphingosine was markedly reduced. These results suggest that, in the cells used: (a) the delivery of endocytosed gangliosides to lysosomes, (b) the flow of poorly glycosylated glycolipids from the Golgi stacks to the trans-Golgi network, and (c) the direct transport of part of endocytosed gangliosides to the late sites of glycosylation (possibly TGN) are mediated by BFA-sensitive vesicles. We propose that in cultured granule cells a BFA-sensitive mechanism regulates ganglioside traffic to and from the plasma membrane.