Tumor Necrosis Factor (TNF) is one of the most potent physiological inducers of the nuclear transcription factor NF-kappa B. In light of the pivotal role of NF-kappa B in the development of immune responses and activation of HIV replication, the identification of TNF signal transduction pathways involved in NF-kappa B activation is of particular interest. Data from our laboratory demonstrate that the TNF signal transduction pathway-mediating NF-kappa B activation involves two phospholipases, a phosphatidylcholine-specific phospholipase C (PC-PLC) and an endosomal acidic sphingomyelinase (aSMase). The aSMase activation by TNF is secondary to the generation of 1,2-diacylglycerol (DAG) produced by a TNF-responsive PC-PLC. SMase and its product ceramide induce degradation of the NF-kappa B inhibitor I kappa B as well as NF-kappa B activation. Besides endosomal acidic SMase, TNF also rapidly activates a plasmamembrane-associated neural SMase (nSMase), that, however is not involved in TNF-induced NF-kappa B activation. NSMase and aSMase are activated by different cytoplasmic domains of the 55 kDa TNF-receptor and are coupled to select pathways of TNF signaling. Ceramide generated by nSMase directs the activation of proline-directed serin/threonine protein kinases and phospholipase A2 and ceramide produced by aSMase triggers the activation of NF-kappa B. No apparent crosstalk was detected between nSMase and aSMase pathways, indicating that ceramide action depends on the topology of its production.