The lysosomal degradation of ceramide is catalyzed by acid ceramidase and requires sphingolipid activator proteins (SAP) as cofactors in vivo. The aim of this study was to investigate how ceramide is hydrolyzed by acid ceramidase at the water-membrane interface in the presence of sphingolipid activator proteins in a liposomal assay system. The degradation of membrane-bound ceramide was significantly increased both in the absence and presence of SAP-D when anionic lysosomal phospholipids such as bis(monoacylglycero)phosphate, phosphatidylinositol, and dolichol phosphate were incorporated into substrate-bearing liposomes. Higher ceramide degradation rates were observed in vesicles with increased membrane curvature. Dilution assays indicated that acid ceramidase remained bound to the liposomal surface during catalysis. Not only SAP-D, but also SAP-C and SAP-A, were found to be stimulators of ceramide hydrolysis in the presence of anionic phospholipids. This finding was confirmed by cell culture studies, in which SAP-A, -C, and -D reduced the amount of ceramide storage observed in fibroblasts of a patient suffering from prosaposin deficiency. Strong protein-lipid interactions were observed for both SAP-D and acid ceramidase in surface plasmon resonance experiments. Maximum binding of SAP-D and acid ceramidase to lipid bilayers occurred at pH 4.0. Our results demonstrate that anionic, lysosomal lipids are required for efficient hydrolysis of ceramide by acid ceramidase.