Neutral ceramidase (NCDase) is considered to be a critical enzyme for controlling the turnover of ceramide, an important bioactive lipid, which determines cell's fate. All-trans retinoic acid (ATRA) has been reported to induce neuronal differentiation and cell-cycle arrest [Lopez-Carballo, Moreno, Masia, Perez, and Barettino (Activation of the phosphatidylinositol 3-kinase/Akt signalling pathway by retinoic acid is required for neural differentiation of SH-SY5Y human neuroblastoma cells. J Biol Chem 2002:277:25297-304.)]. In this study, we observed that ATRA-induced cellular ceramide accumulation, cell-growth arrest and differentiation accompanied with down-regulation of NCDase in SH-SY5Y cells, without a decrease in sphingosine or sphingosine 1-phosphate. We examined whether the down-regulation of NCDase was involved in the increase in ceramide and cell differentiation. ATRA was found to down-regulate mRNA, protein and the enzyme activity of NCDase. Interestingly, GATA-2 was also decreased with ATRA treatment, and experiments using its expression vector and siRNA and chromatin immunoprecipitation assay demonstrated GATA-2 acted as transcription-factor of NCDase gene expression. By establishing stable transfectants with decreased NCDase expression and activity, we clarified the significance of NCDase down-regulation for ATRA-induced neuronal differentiation. Those sub-clones showed both increased cellular ceramide and reduced cell growth as well as neuronal differentiation phenotypes. These results demonstrate that down-regulation of NCDase through ATRA-induced GATA-2 decrease plays an important role in induction of ceramide accumulation and neuronal differentiation in SH-SY5Y cells.