Treatment of confluent rat2 fibroblasts with C2-ceramide (N-acetylsphingosine), sphingomyelinase, or tumor necrosis factor-alpha (TNFalpha) increased phosphatidylinositol (PI) 3-kinase activity by 3-6-fold after 10 min. This effect of C2-ceramide depended on tyrosine kinase activity and an increase in Ras-GTP levels. Increased PI 3-kinase activity was also accompanied by its translocation to the membrane fraction, increases in tyrosine phosphorylation of the p85 subunit, and physical association with Ras. Activation of PI 3-kinase by TNFalpha, sphingomyelinase, and C2-ceramide was inhibited by tyrosine kinase inhibitors (genistein and PP1). The stimulation of PI 3-kinase by sphingomyelinase and C2-ceramide was not observed in fibroblasts expressing dominant-negative Ras (N17) and the stimulation by TNFalpha was decreased by 70%. PI 3-kinase activation by C2-ceramide was not modified by inhibitors of acidic and neutral ceramidases, and it was not observed with the relatively inactive analog, dihydro-C2-ceramide. It is proposed that activation of Ras and PI 3-kinase by ceramide can contribute to signaling effects of TNFalpha that occur downstream of sphingomyelinase activation and result in increased fibroblasts proliferation.