Abstract Ceramide is a bioactive lipid signaling molecule that regulates multiple cellular processes influencing pancreatic tumor progression and drug response. The pleiotropic role of ceramide signaling in cancer includes modulation of exosome biogenesis and secretion. Smpd3 encodes an enzyme that generates ceramide through hydrolysis of sphingomyelin. Employing the KPC mouse model of pancreatic cancer, we demonstrated that Smpd3 regulates exosome biogenesis in pancreatic ductal adenocarcinoma (PDA) cells and is pro-tumorigenic during PDA progression. Ablation of Smdp3 in KPC mice significantly extends survival by 19% when compared to KPC; Smpd3wt/wt controls. KPC; Smpd3f/f mice display significantly less PanIN and tumor burden compared to KPC; Smpd3wt/wt controls. Lipidomics analysis of epithelial cell lines generated from end-stage pancreatic tumors of KPC; Smpd3f/f and KPC; Smpd3wt/wt mice demonstrated an alteration in hundreds of lipid species including ceramides, triacylglycerides, sphingomyelins, and phosphatidylcholines. Analysis of RNA-seq data of these epithelial cell lines showed a switching of primary tumors from the predominant more aggressive basal-like subtype seen in KPC; Smpd3wt/wt mice to classical in KPC; Smpd3f/f mice. Pathways analysis of our RNA-seq dataset showed an enrichment for genes involved in cellular mechanics and regulation of the tumor microenvironment. To query if Smpd3-generated exosomes have a direct effect on pancreatic tumor progression, we injected KPC; Smpd3wt/wt and KPC; Smpd3f/f mice with exosomes isolated from KPC; Smpd3f/f and KPC; Smpd3wt/wt PDA cell lines. Injection of exosomes derived from KPC; Smpd3f/f mice significantly extended survival of both Smpd3wt/wt and KPC; Smpd3f/f mice when compared to injection of exosomes isolated from KPC; Smpd3wt/wt mice, suggesting an anti-tumorigenic effect of exosomes isolated from Smpd3-deficient PDA cell lines. We observed a decrease in extracellular matrix collagen abundance and fewer activated stellate cells and fibroblasts in KPC; Smpd3f/f compared to control KPC; Smpd3wt/wt pancreata. Abrogation of Smpd3 expression also affected immune cell infiltration, as demonstrated by a significant increase in iNOS+ F4/80+ double positive macrophages in KPC; Smpd3f/f pancreata when compared to KPC; Smpd3wt/wt pancreata. Loss of Smpd3 resulted in a significant reduction in CD31+ endothelial cells in pancreatic tumors of KPC; Smpd3f/f mice when compared to KPC; Smpd3wt/wt mice, which may influence the ability of chemotherapeutics to enter pancreatic tumors. Our patient data demonstrate that high SMPD3 expression in surgically resected, treatment naive PDA significantly correlated with longer patient survival when patients received adjuvant chemotherapy, more than 95% of which was gemcitabine. Collectively, our data show that ceramide-dependent exosomes promote tumorigenesis, specifically activation of stellate cells and fibroblasts – which may in turn induce a stiff, fibrotic, proinflammatory tumor microenvironment that also impedes vasculature formation. Citation Format: Audrey M. Hendley, Atsushi Urano, Xianlu L. Peng, Sudipta Ashe, Natanya R. Kerper, Tuan A. Phu, Martin Ng, Simone Giacometti, David I. Berrios, Gun H. Jang, Jen J. Yeh, Steven Gallinger, David K. Chang, Andrew V. Biankin, Valerie M. Weaver, Grace E. Kim, David W. Dawson, Robert L. Raffai, Matthias Hebrok. Ceramide signaling regulates PDA aggression through exosome reprogramming of the stroma [abstract]. In: Proceedings of the AACR Special Conference on Pancreatic Cancer; 2022 Sep 13-16; Boston, MA. Philadelphia (PA): AACR; Cancer Res 2022;82(22 Suppl):Abstract nr C051.