Simple sphingolipids such as ceramide, sphingosine and sphingosine 1-phosphate are key regulators of diverse cellular functions. Their roles in the nervous system are supported by extensive evidence derived primarily from studies in cultured cells. More recently animal studies and studies with human samples have revealed the importance of ceramide and its metabolites in the development and progression of neurodegenerative disorders. The roles of sphingolipids in neurons and glial cells are complex, cell dependent, and many times contradictory. In this review I will summarize the effects elicited by ceramide and ceramide metabolites in cells of the nervous system, in particular those effects related to cell survival and death, emphasizing the molecular mechanisms involved. I also discuss recent evidence for the implication of sphingolipids in the development and progression of certain dementias.