Human fibroblasts in culture take up exogenous [choline-Me-3H,32P]sphingomyelin (SM) from the medium and incorporate it into cellular SM and phosphatidylcholine [Spence, Clarke & Cook (1983) J. Biol. Chem. 258, 8595-8600]. The ratio of [3H]choline/[32P]Pi is similar in SM and phosphatidylcholine, indicating that the phosphocholine (P-Cho) moiety is transferred intact. Similar results are obtained with Niemann-Pick (NP) cells which are deficient in lysosomal sphingomyelinase activity, suggesting that the P-Cho transfer may not be mediated by the lysosomal sphingomyelinase and that alternative pathways of sphingomyelin catabolism are present in cultured cells. In this study we have shown that: (1) the P-Cho pool in control and NP cells incubated with exogenous labelled SM has a specific radioactivity intermediate between that of SM and PtdCho; (2) expansion of the intracellular P-Cho pool by incubation with exogenous choline reduces the incorporation of [3H]choline from SM into PtdCho; and (3) incorporation of P-Cho from SM into PtdCho is decreased at the non-permissive temperature in Chinese hamster ovary cells with a temperature-sensitive mutation in the cytidylyltransferase reaction. These results suggest that incorporation of P-Cho from SM into PtdCho involves a reaction sequence in which P-Cho is hydrolysed from SM by a sphingomyelinase, followed by incorporation of P-Cho into PtdCho via the cytidine pathway of biosynthesis (SM----P-Cho----CDP-Cho----PtdCho). The appreciable incorporation of P-Cho from SM into PtdCho in sphingomyelinase-deficient NP cells suggests a more substantial or effective lysosomal sphingomyelinase activity in intact cells than is measured in vitro, and/or a significant contribution by other sphingomyelinase activities in these cells.