We have in this study examined the effects of sphingosine, a possible secondary degradation product following sphingomyelin hydrolysis, on cholesterol homeostasis in cultured human fibroblasts treated with sphingomyelinase. The activation of cholesterol esterification, which resulted from the degradation of plasma membrane sphingomyelin (by sphingomyelinase), was observed to be effectively blocked by sphingosine (half-maximal dose 6–7 μM). The inhibitory action of sphingosine could not be reproduced with other amines (e.g., dodecyl amine or imipramine). The onset of inhibition of cholesteryl ester formation by sphingosine was rapid (maximal effect within 15 min). Sphingosine itself had no spontaneous effects on the distribution of cellular cholesterol. At concentrations below 10 μM, sphingosine was not cytotoxic, as determined by cellular trypan blue permeability. The inhibitory action of sphingosine on cholesteryl ester formation apparently did not result from a direct inhibition of acyl-CoA cholesterol acyltransferase (ACAT), since the activity of this enzyme was unaffected by sphingosine (10 μM) in a cell-free homogenate, using [ 14C]oleoyl-CoA as a co-substrate. Sphingosine was also unable to prevent the formation of activated fatty acids (oleoyl-CoA), since acyl-CoA synthetase activity in a cell-free homogenate was not inhibited by sphingosine (at 5 μM). The cellular cholesteryl ester cycle (i.e., the neutral cholesteryl ester hydrolase) was unaffected by sphingosine (at 5 μM). Down-regulation of PKC activity (24 h exposure of cells to 100 nM (62 ng/ml) phorbol ester) did not affect the sphingomyelinase-induced stimulation of [ 3H]cholesteryl ester formation. In addition, the sphingosine-induced inhibition of [ 3H]cholesteryl ester formation was not reversed in the presence of phorbol ester (short-term exposures), suggesting that the effect of sphingosine was not mediated via PKC. In conclusion, we have shown that sphingosine is an inhibitor of cholesteryl ester formation in fibroblasts. The inhibition is only seen with intact cells, which may suggest that a secondary metabolite of sphingosine was responsible for the observed inhibition of cholesteryl ester formation.