Recent studies in the Pi's laboratory have identified a sphingomyelin cycle of cell regulation whereby the action of extracellular agents (such as TNFalpha) results in activation of a neutral sphingomyelinase which cleaves membrane sphingomyelin. This causes the release of the putative lipid second messenger ceramide. Ongoing evidence suggests that ceramide may play a key role in the regulation of growth arrest and apoptosis. The major focus of the PI's laboratory has, therefore, concentrated on defining this novel sphingolipid-dependent pathway of cell regulation in an attempt to define its components, characterize its mechanism, and discern its physiologic roles. Therefore, the specific aims are: i) Determine the mechanism of SM hydrolysis and ceramide generation by characterizing and purifying the novel neutral sphingomyelinase and studying its regulation. 2) Determine down stream targets for the action of ceramide. This aim will focus on exploiting yeast molecular genetics for defining downstream targets of ceramide, (since the basic elements of this pathway have been identified in S. cerevisiae). 3) Define and characterize ceramide-activated protein phosphatase as a proximal target for the action of ceramide by purifying, characterizing, and examining regulation of this phosphatase, and by determining its role in mediating cellular effects of ceramide and TNFalpha. These studies are beginning to define a novel pathway of signal transduction and cell regulation at the biochemical and molecular level. The sphingomyelin/ceramide pathway may provide important new insight into mechanisms regulating growth arrest and programmed cell death.