Neutral sphingomyelinase-2 (nSMase-2) is the major sphingomyelinase activated in response to pro-inflammatory cytokines and during oxidative stress. It is a membrane-bound 655 amino acid protein containing 22 cysteine residues. In this study, we expressed recombinant mouse nSMase-2 protein in Escherichia coli, and investigated whether nSMase-2 is a redox sensitive enzyme. Our results demonstrate that nSMase-2 exists as both monomers and multimers that are associated with high and low enzymatic activity respectively. Mutational analysis of nSMase-2 identified within its C-terminal catalytic domain several oxidant-sensitive cysteine residues that were shown to be involved in enzyme oligomerization. Changing Cys(617) to Ser for example is a gain-of-function mutation associated with a decreased propensity for oligomerization. Alternatively, nSMase-2 expression in a bacterial strain that lacks endogenous thioredoxin, Rosetta-gami2, results in increased oligomer formation and lower enzyme activity. Phenotypic rescue was accomplished by treating nSMase-2 lysates with recombinant human thioredoxin. This indicates that nSMase-2 may be a novel substrate for thioredoxin. FRET analysis confirmed the presence of nSMase-2 multimers in mammalian HEK cells and their localization to the plasma membrane. In conclusion, our results identify nSMase-2 as a redox-sensitive enzyme, whose basal activity is influenced by thioredoxin-mediated changes in its oligomeric state.