The search for potential targets for ceramide action led to the identification of ceramide-activated protein phosphatases, which include protein phosphatase-2A (PP2A) and protein phosphatase-1 (PP1) with roles in regulating apoptosis and cell growth. Thus far, in vitro studies on ceramide-activated protein phosphatases have been restricted to the use of short chain ceramides, limiting the extent of mechanistic insight. In this study, we show that the long chain D-erythro-C18-ceramide activated PP2A (AB'C trimer), PP2Ac (catalytic subunit of PP2A), and PP1gammac and -alphac (catalytic subunits of PP1gamma and -1alpha isoforms, respectively) 2-6-fold in the presence of dodecane, a lipid-solubilizing agent, with 50% maximal activation achieved at approximately 10 microM D-erythro-C18-ceramide. The diastereoisomers of D-erythroC18-ceramide, D-threo-, and L-threo-C18-ceramide, as well as the enantiomeric L-erythro-C18-ceramide, did not activate PP1 or PP2A, but they inhibited PP1 and PP2A activity. The addition of phosphatidic acid decreased the basal activity of PP1c but also increased the stimulation by D-erythro-C18-ceramide from 1.8- to 2. 8-fold and decreased the EC50 of D-erythro-C18-ceramide to 4.45 microM. The addition of 150 mM KCl decreased the basal activity of PP1 and the dose of D-erythro-C18-ceramide necessary to activate PP1c (EC50 = 6.25 microM) and increased the ceramide responsiveness up to 10-17-fold. These studies disclose stereospecific activation of PP1 and PP2A by long chain natural ceramides under near physiologic ionic strengths in vitro. The implications of these studies for mechanisms of ceramide action are discussed.