Traumatic brain injury (TBI) is one of the leading causes of disability worldwide and a prominent risk factor for neurodegenerative diseases. The expansion of nervous tissue damage after the initial trauma involves a multifactorial cascade of events, including excitotoxicity, oxidative stress, inflammation, and deregulation of sphingolipid metabolism that further mitochondrial dysfunction and secondary brain damage. Here, we show that a posttranscriptional activation of an acid sphingomyelinase (ASM), a key enzyme of the sphingolipid recycling pathway, resulted in a selective increase of sphingosine in mitochondria during the first week post-TBI that was accompanied by reduced activity of mitochondrial cytochrome oxidase and activation of the Nod-like receptor protein 3 inflammasome. TBI-induced mitochondrial abnormalities were rescued in the brains of ASM KO mice, which demonstrated improved behavioral deficit recovery compared with WT mice. Furthermore, an elevated autophagy in an ASM-deficient brain at the baseline and during the development of secondary brain injury seems to foster the preservation of mitochondria and brain function after TBI. Of note, ASM deficiency attenuated the early stages of reactive astrogliosis progression in an injured brain. These findings highlight the crucial role of ASM in governing mitochondrial dysfunction and brain-function impairment, emphasizing the importance of sphingolipids in the neuroinflammatory response to TBI.