Effects of all-trans retinoic acid (ATRA) on sphingomyelinase expression were examined using MCF-7 (ATRA-sensitive) and MDA-MB-231 (ATRA-resistant) breast cancer cells. Increased NSMase activity, NSMase2 mRNA and protein were observed in ATRA-treated MCF-7 but not in ATRA-treated MDA-MB-231. Increased NSMase2 mRNA of ATRA-treated MCF-7 was mostly due to enhanced transcription. Promoter analysis revealed the important 5'-promoter region of NSMase2 between -148 and -42 bp containing three Sp1 sites but no retinoic acid responsive elements. Experiments using mutated Sp1 sites of the NSMase2 promoter, Mithramycin A (a Sp inhibitor) and Sp family over-expression demonstrated the importance of Sp family protein and the three Sp1 sites for ATRA-induced NSMase2 transcription of MCF-7 cells. Although no quantitative change of bound Sp1 on NSMase2 promoter region after ATRA treatment was detected, Sp1 phosphorylation (activation) by ATRA was observed. Interestingly, PKCδ was involved in ATRA-induced increased NSMase2 transcription. ATRA-induced PKCδ phosphorylation and then activated PKCδ phosphorylated Sp1. Chromatin immunoprecipitation (ChIP) assay showed Sp1, RARα and RXRα complex formation in MCF-7 cells regardless of ATRA treatment and ATRA-induced acetylated histone H3 of the 5'-promoter. Thus, NSMase2 mRNA expression enhanced by ATRA was due to increased transcription via phosphorylated Sp1 caused by PKCδ activation, followed by chromatin remodelling with histone H3 acetylation.