Ceramide, generated during sphingomyelinase-induced sphingolipid cleavage, is considered an important mediator in cytokine signaling. The effects of endogenously generated and exogenously delivered ceramide on long-term insulin secretion and replication by pancreatic beta-cells were investigated, and compared to the effects of interleukin 1 beta (IL-1 beta). Generation of beta-cell ceramide by exogenous sphingomyelinase, or addition of cell-permeant ceramide analogs C2-ceramide and C6-ceramide, caused inhibitor effects on beta-cell insulin production and mitogenesis mimicing those evoked by IL-1 beta. Hence, ceramide may be involved in transducing the cytostatic and cytotoxic actions of IL-1 beta in the beta-cell.