Tumor necrosis factor alpha (TNF-alpha) is a potent, pleiotrophic cytokine, which is proinflammatory but can also suppress T lymphocyte function. In chronic inflammatory disease such as rheumatoid arthritis, exposure of T cells to TNF-alpha alters their ability to mount a response by modulating the T cell receptor (TCR) signaling pathway, but the mechanisms involved remain obscure. Here, we investigated the specific role of TNF receptor 1 (TNFR1) signaling in the modulation of the TCR signaling pathway. We observed a down-regulation of the intracellular calcium ([Ca(2+)](i)) signal in Jurkat T cells after just 30 min exposure to TNF-alpha, and maximum suppression was reached after 3 h. This effect was transient, and signals returned to normal after 12 h. This depression of [Ca(2+)](i) was also observed in human CD4+ T lymphocytes. The change in Ca(2+) signal was related to a decrease in the plasma membrane Ca(2+) influx, which was apparent even when the TCR signal was bypassed using thapsigargin to induce a Ca(2+) influx. The role of TNF-alpha-induced activation of the sphingolipid cascade in this pathway was examined. The engagement of TNFR1 by TNF-alpha led to a time-dependent increase in acid sphingomyelinase (SMase; ASM) activity, corresponding with a decrease in cellular sphingomyelin. In parallel, there was an increase in cellular ceramide, which correlated directly with the decrease in the magnitude of the Ca(2+) response to phytohemagglutinin. Exogenous addition of SMase or ceramide mimicked the effects of TNFR1 signals on Ca(2+) responses in Jurkat T cells. Direct evidence for the activation of ASM in this pathway was provided by complete abrogation of the TNF-alpha-induced inhibition of the Ca(2+) influx in an ASM-deficient murine T cell line (OT-II(+/+)ASM(-/-)). This potent ability of TNF-alpha to rapidly modulate the TCR Ca(2+) signal via TNFR1-induced ASM activation can explain its suppressive effect on T cell function. This TNFR1 signaling pathway may play a role as an important regulator of T cell responses.