Ceramide induces cell cycle arrest and apoptotic cell death associated with increased levels of p27(kip1). The aim of this study was to examine the effects of ceramide on p27(kip1) protein levels as a measure of cell cycle arrest and apoptosis. Results showed that ceramide increased p27(kip1) protein levels through activation of protein phosphatase 2A (PP2A) in PC-3 prostate cancer cells. Treatment of cells with the PP2A inhibitor okadaic acid or with PP2A-Cα siRNA inhibited ceramide-induced enhanced p27(kip1) protein expression and Akt dephosphorylation, and prevented Skp2 downregulation. Overexpression of constitutively active Akt attenuated ceramide-induced Skp2 downregulation and p27(kip1) upregulation. In addition, ceramide stimulated binding of the PP2A catalytic subunit PP2A-Cαβ to Akt as assessed by immunoprecipitation experiments, indicating that PP2A is involved in the induction of p27(kip1) via inhibition of Akt pathway. Finally, whether PP2A can regulate p27(kip1) expression independently of Akt pathway was determined. Knockdown of PP2A-Cα with siRNA reduced p27(kip1) levels in the presence of Akt inhibitor. These data reveal that PP2A is a regulator of ceramide-induced p27(kip1) expression via Akt-dependent and Akt-independent pathways.