The mechanism of crosstalk between signaling pathways coupled to the Trk A and p75(NTR) neurotrophin receptors in PC12 cells was examined. In response to nerve growth factor (NGF), Trk A activation inhibited p75(NTR)-dependent sphingomyelin (SM) hydrolysis. The phosphoinositide 3-kinase (PI 3-kinase) inhibitor, LY294002, reversed this inhibition suggesting that Trk A activation of PI 3-kinase is necessary to inhibit sphingolipid signaling by p75(NTR). In contrast, SM hydrolysis induced by neurotrophin-3 (NT-3), which did not activate PI-3 kinase, was uneffected by LY294002. However, transient expression of a constituitively active PI 3-kinase inhibited p75(NTR)-dependent SM hydrolysis by both NGF and NT-3. Intriguingly, NGF induced an association of activated PI 3-kinase with acid sphingomyelinase (SMase). This interaction localized to caveolae-related domains and correlated with a 50% decrease in immunoprecipitated acid SMase activity. NGF-stimulated PI 3-kinase activity was necessary for inhibition of acid SMase but was not required for ligand-induced association of the p85 subunit of PI 3-kinase with the phospholipase. Finally, this interaction was specific for NGF since EGF did not induce an association of PI 3-kinase with acid SMase. In summary, our data suggest that PI 3-kinase regulates the inhibitory crosstalk between Trk A tyrosine kinase and p75(NTR)-dependent sphingolipid signaling pathways and that this interaction localizes to caveolae-related domains.