Purified myelin from mouse brain was found to contain two forms of neutral sphingomyelinase, one Mg2+ dependent and the other Mg2+ independent. The former had a pH optimum of 7.5 and Km of 0.35 mM, whereas the corresponding values for the latter were pH 8.0 and Km 3.03 mM. Specific activity of the Mg(2+)-dependent enzyme showed a rostral-caudal gradient, ranging from 75 nmol/mg protein/hr in myelin from cerebral hemispheres to 21 nmol/mg protein/hr in myelin from spinal cord. Relative specific activity was approximately 20% that of brain stem or cerebral hemisphere homogenate. Treatment of myelin with taurocholate or high salt concentration did not significantly reduce activity of the Mg(2+)-dependent enzyme. The activity of that enzyme did not change with time or in the presence or absence of protease inhibitors; by contrast, that of Mg(2+)-independent enzyme decreased sharply in the absence of protease inhibitors but rose in their presence. To test for the effect of tumor necrosis factor-alpha (TNF alpha) on myelin sphingomyelinase, mouse brain myelin was labeled in vivo by intracerebral injection of [3H]acetate into 18-20-day-old mice. After 40 hr, brain stems were removed, minced, and treated with TNF alpha in Krebs-Ringer solution, after which myelin was immediately isolated. Separation and counting of individual lipids revealed TNF alpha treatment to cause increased labeling of myelin ceramide and cholesterol ester with concomitant decrease in myelin sphingomyelin. Western blotting of myelin proteins using antibodies to the two TNF alpha receptors as probes revealed the presence of the p75 receptor. Implications of these findings in relation to possible mechanisms of autoimmune demyelination are discussed.