The subcellular distributions of the enzymes which synthesise sphingomyelin (SM) and glucosylceramide (GluCer) from ceramide have been assessed in BHK cells. On a sucrose density gradient GluCer synthase (a marker of the cis/medial Golgi apparatus) and the trans-Golgi marker galactosyltransferase showed an similar monotonic distribution. In contrast, SM synthase showed two peaks of activity, a minor one which migrated with the Golgi markers and a major one which had a density close to that of plasma membrane markers (sphingomyelin, cholesterol, PtdSer, ganglioside GM3 and alkaline phosphodiesterase). When cell homogenates were treated with digitonin, the sedimentation characteristics of the Golgi markers was largely unaffected whereas the plasma membrane markers and the main peak of SM synthase activity were shifted to higher density. In contrast, when cells were treated with brefeldin A (BFA) the Golgi markers were shifted to higher density but not the plasma membrane markers or the main peak of SM synthase. These results suggest that the bulk of SM synthase activity in BHK cells is not associated with the Golgi cisternae but with a cell compartment which is relatively rich in cholesterol (e.g., plasma membrane, endosomes or trans-Golgi network.) Further experiments in which cells were treated with sphingomyelinase provided evidence that SM synthase activity was in an internal compartment and not at the plasma membrane.