The crude protein fraction of human duodenal contents catalyzed the formation of ceramide from sphingomyelin most efficiently at slightly alkaline pH in the presence of conjugated bile salts. Under optimal conditions 1 ml duodenal contents hydrolyzed up to 300 nmole sphingomyelin per h. The hydrolysis of ceramide to sphingosine and free fatty acids and the reverse reaction were also catalyzed. The pH optimum of this reaction was about 7.6. That the enzymes are of intestinal origin was indicated by the data obtained when sphingomyelin and ceramide were incubated with rat pancreatic juice, pancreas homogenate and homogenate of pig intestinal mucosa. The preparations all had low sphingomyelinase activity at a pH of about 5, but only the pig mucosa homogenate had significant hydrolytic activity against sphingomyelin at alkaline pH and against oleoyl-sphingosine at pH 7.6. The latter enzymic activities were enriched in a brush-border preparation of rat intestinal mucosa to the same extent as the alkaline phosphatase activity. The brush border may therefore be the main site of hydrolysis of dietary sphingomyelin.