Hepatic monoacylglycerol acyltransferase (MGAT), a developmentally-regulated microsomal activity that catalyzes the synthesis of sn-1,2-diacylglycerol, is regulated by anionic phospholipids and sn-1,2-diacylglycerol in Triton X-100 mixed micelles. Spingomyelin stimulated MGAT activity, whereas sphingosine, sphinganine, phytosphingosine, and stearylamine were inhibitors (IC50 of 9, 5.5, 5, and 6 mol %, respectively). Since ceramide and octylamine had relatively little effect, inhibition appears to require a free amino group and a long-chain hydrocarbon. Inhibition by sphingosine was competitive with respect to phosphatidic acid, phosphatidylinositol, or phosphatidylserine, suggesting that anionic phospholipids may activate MGAT at a specific site that is competitively blocked by sphingolipids. Both sphingosine and sphinganine inhibited MGAT activity in cultured hepatocytes from 10-day-old rats in a dose-dependent manner. Stimulation of MGAT activity by diacylglycerol was specific for sn-1,2-stereoisomers that contained two long fatty acyl chains. The diacylglycerol analogs phorbol 12-myristyl 13-acetate and ceramide had no effect. The highly cooperative activation of MGAT by sn-1,2-diacylglycerol was also inhibited by sphingosine. It is unlikely that activation of MGAT by low molar concentrations of anionic phospholipids is solely due to electrostatic interactions between the enzyme and negatively charged lipids because high ionic strength, neomycin, and Ca2+ had similar effects on enzyme activity irrespective of the presence or absence of phosphatidic acid. These data suggest that MGAT activity may be regulated physiologically by specific intermediates of glycerolipid metabolism and that, in neonatal rat liver, signal transduction may be linked to the synthesis of complex lipids via the monoacylglycerol pathway.