A developmentally regulated loss of membrane cholesterol was reported to be sufficient and necessary for activation of neurotrophic tyrosine kinase receptor type 2 (TrkB) in aged neurons in vitro. However, TrkB activity in low cholesterol neurons remains confined to detergent-resistant membrane fractions, indicating that additional lipidic changes occur with age. Analysis of neuronal lipids at different developmental stages revealed a sharp increase in sphingomyelin (SM) during neuronal maturation. Reduction of SM abrogated TrkB activation in mature neurons, whereas increasing SM in immature neurons triggered receptor activation. TrkB activity in high SM background was the consequence of enhanced phosphorylation in the detergent-resistant fractions and increased Rac1-mediated endocytosis. The current results reveal developmental upregulation of SM as an important mechanism for sustaining TrkB activity in the mature nervous system, in addition to the presence of brain-derived neurotrophic factor (BDNF).