In this paper, we describe a phospholipid transmission pathway mediating tumor necrosis factor (TNF) activation of the nuclear transcription factor kappa B (NF-kappa B). Central to this TNF signaling route is the second messenger-like molecule ceramide, which is generated by sphingomyelin (SM) breakdown catalyzed by a sphingomyelinase (SMase). SMase activation is secondary to the generation of 1,2-diacylglycerol (DAG) produced by a TNF-responsive PC-specific phospholipase C (PC-PLC). The functional coupling of these two C type phospholipases is revealed by D609, a selective inhibitor of PC-PLC. SMase itself, or SMase-inducing regimens such as exogenous PLC or synthetic DAGs, induces NF-kappa B activation at pH 5.0, suggesting the operation of an acidic SMase. A model is proposed in which a TNF-responsive PC-PLC via DAG couples to an acidic SMase, resulting in the generation of ceramide, which eventually triggers rapid induction of nuclear NF-kappa B activity.