Axotomy of sympathetic superior cervical ganglia (SCG) causes Schwann cells to induce mRNA encoding leukemia inhibitory factor (LIF), a neuropoietic cytokine that has been shown to promote sympathetic neuron survival and peptide gene regulation. LIF mRNA is virtually undetectable in uninjured SCG, but is induced by the inflammatory cytokine interleukin-1 (IL-1). The SC1 Schwann cell line was used to study this regulatory mechanism. LIF mRNA increased five-to-tenfold in SC1 cells when IL-1 receptors were stimulated with IL-1. The action of IL-1 is thought to be mediated by the type I IL-1 receptor (IL-1RI), which has been suggested to stimulate a ceramide-dependent protein kinase pathway, much like tumor necrosis factor-alpha. However, stimulation of the ceramide-dependent protein kinase pathways in SC1 cells with either 2-acetylceramide or sphingomyelinase treatment does not induce LIF mRNA accumulation, but 2-acetylceramide addition induces cyclooxygenase-2 mRNA in parallel experiments. Inhibition of phosphotidylcholine-phospholipase C activity, endosomal acidification, or activity of atypical protein kinase C reduce LIF induction by IL-1. These results are consistent with IL-1 regulation of LIF mRNA through stimulation of the endosomal, acidic sphingomyelinase pathway, leading to ceramide activation of protein kinase C zeta. Utilization of this branch of the ceramide signaling pathway may be cell type specific or may be specific for the LIF mRNA response.