Binding of nerve growth factor (NGF) to the p75 neurotrophin receptor (p75) in cultured hippocampal neurons has been reported to cause seemingly contrasting effects, namely ceramide-dependent axonal outgrowth of freshly plated neurons, versus Jun kinase (Jnk)-dependent cell death in older neurons. We now show that the apoptotic effects of NGF in hippocampal neurons are observed only from the 2nd day of culture onward. This switch in the effect of NGF is correlated with an increase in p75 expression levels and increasing levels of ceramide generation as the cultures mature. NGF application to neuronal cultures from p75(exonIII-/-) mice had no effect on ceramide levels and did not affect neuronal viability. The neutral sphingomyelinase inhibitor, scyphostatin, inhibited NGF-induced ceramide generation and neuronal death, whereas hippocampal neurons cultured from acid sphingomyelinase(-/-) mice were as susceptible to NGF-induced death as wild type neurons. The acid ceramidase inhibitor, (1S,2R)-d-erythro-2-(N-myristoylamino)-1-phenyl-1-propanol, enhanced cell death, supporting a role for ceramide itself and not a downstream lipid metabolite. Finally, scyphostatin inhibited NGF-induced Jnk phosphorylation in hippocampal neurons. These data indicate an initiating role of ceramide generated by neutral sphingomyelinase in the diverse neuronal responses induced by binding of neurotrophins to p75.