Sphingomyelin hydrolysis through the activation of sphingomyelinases has become a potentially important signaling pathway with the product ceramide implicated in the regulation of cell growth, differentiation, apoptosis, and inflammatory responses. However, little is known about the regulation of sphingomyelinases. In this study, we show that the magnesium-dependent, neutral pH-optimum and membrane-associated sphingomyelinase (N-SMase) is inhibited, in a dose-dependent manner, by glutathione (GSH) at physiological concentrations with a greater than 95% inhibition observed at 5 mM GSH. The inhibitory effect of GSH was reproduced by gamma-glutamyl-cysteine, but not the cysteinyl-glycine fragment of GSH. The S-modified GSH analogs were as effective as GSH in inhibiting the N-SMase. On the other hand, neither dithiothreitol nor beta-mercaptoethanol had any effect on the N-SMase, suggesting that the sulfhydryl in GSH is not required for inhibition of N-SMase. GSH had no effect on the acid pH-optimum SMase, whereas dithiothreitol inhibited the acid SMase. These results suggest that in cells the N-SMase is inactive in the presence of physiological concentrations of GSH (1-20 mM). Finally, treatment of cultured Molt-4 cells with the GSH synthesis inhibitor, L-buthionine-(SR)-sulfoximine, resulted in a time-dependent depletion of GSH, accompanied by an increased hydrolysis of sphingomyelin and production of ceramide. Since GSH depletion is observed in a variety of cells in the process of cellular injury and apoptosis, these studies suggest that depletion of GSH may be an important mechanism in activation of N-SMase. This mechanism may therefore bring together the fields of oxidative stress and signaling through products of sphingomyelin hydrolysis.