A novel pathway for ceramide metabolism, 1-O-acylceramide formation, was previously reported (Abe, A., Shayman, J. A., and Radin, N. S. (1996) J. Biol. Chem. 271, 14383-14389). In this pathway a fatty acid in the sn-2 position of phosphatidylethanolamine or phosphatidylcholine is transferred to the 1-hydroxyl position of ceramide. An enzyme that catalyzes the esterification of N-acetylsphingosine was purified from the postmitochondrial supernatant of calf brain through consecutive steps, including ammonium sulfate fractionation, DEAE-Sephacel, phenyl-Sepharose, S-Sepharose, Sephadex G-75, concanavalin A-agarose, and heparin-Sepharose chromatography. The molecular mass of the enzyme was determined to be 40 kDa by gel filtration on Sephadex G-75. The enzyme bound to concanavalin A-agarose column was eluted with the buffer containing 500 mM alpha-methyl-D-mannopyranoside. Further purification by heparin-Sepharose chromatography resulted in separation of two peaks of enzyme activity. Coincidence between the transacylase activity and a stained protein of a molecular mass of 40 kDa was observed, as determined by SDS-polyacrylamide gel electrophoresis and recovery after separation over an acidic native gel. The second peak of activity from the heparin-Sepharose chromatography represented a purification of 193,000-fold. These results are consistent with the enzyme being a glycoprotein of a molecular mass of about 40 kDa with a single polypeptide chain. The purified enzyme had a pH optimum at pH 4.5. The divalent cations Ca2+ and Mg2+ enhanced but were not essential for the transacylase activity. Neither activation nor inactivation of the enzyme activity was observed in the presence of 2 mM ATP or 2 mM dithiothreitol. Preincubation of the enzyme with 1 mM N-ethylmaleimide, 1 mM phenylmethylsulfonyl fluoride, or 3.1 microM bromoenol lactone, a potent inhibitor of cytosolic Ca2+-independent phospholipase A2, had no significant effect on the enzyme activity. The enzyme activity was completely abolished in the presence of greater than 773 microM Triton X-100. Partial inhibition of the enzyme activity was observed in the presence of 10-100 microg/ml heparin. In the absence of N-acetylsphingosine, the enzyme acted as a phospholipase A2. These results strongly suggest that 1-O-acylceramide synthase is both a transacylase and a novel phospholipase A2.