Nitric oxide and reactive oxygen species play a critical role in photoreceptor apoptosis. However, the exact molecular mechanisms triggered by oxidative stress in photoreceptor cell death remain undefined. Here, we demonstrate that the sphingolipid ceramide is the key mediator of oxidative stress-induced apoptosis in 661W retinal photoreceptor cells. Treatment of 661W cells with the nitric oxide donor, sodium nitroprusside, activates acid sphingomyelinase. As a result, sphingomyelin is hydrolysed, which leads to an increase in the concentration of ceramide. We also show that ceramide is responsible for the activation of the mitochondrial apoptotic pathway in 661W photoreceptor cells and subsequent activation of the caspase cascade. Furthermore, we show for the first time that ceramide is responsible for the increased Ca2+ levels in the mitochondria and cytosol that precedes activation of the calpain-mediated apoptotic pathway. Additionally, we provide evidence that ceramide also activates the endolysosomal protease cathepsin D pathway. In summary, our findings show that ceramide controls the cell death decisions in photoreceptor cells and highlight the relevance of acid sphingomyelinase as a potential therapeutic target for the treatment of retinal pathologies.