In macrophages, bacterial lipopolysaccharide (LPS) has been noted to mimic certain effects of the sphingolipid ceramide, suggesting that ceramide may be involved in macrophage activation by LPS and/or that LPS utilizes ceramide-related signaling pathways. Putative downstream targets of ceramide include a ceramide-activated (serine/threonine) protein kinase (CAPK) and phosphatase (CAPP). However, the potential role of tyrosine phosphorylation pathways in macrophage response to ceramide has not been examined. Herein we report that cell-permeable analogs of ceramide up-regulate both inducible nitric oxide synthase (iNOS) and tumor necrosis factor (TNF) production in RAW 264.7 murine macrophages. Herbimycin A and genistein, potent natural inhibitors of protein tyrosine (but not serine/threonine) phosphorylation, block ceramide-induced iNOS and TNF production. Furthermore, the highly src-family selective pyrazolopyrimidine inhibitor PP1 also blocks ceramide-induced iNOS and TNF production in RAW 264.7 cells. We found that PP1 also inhibits ceramide-mediated tyrosine phosphorylation of the src-family kinase hck. These data indicate that src-related tyrosine kinases play a critical role in macrophage activation by ceramide.