Peptide hormones act to regulate apoptosis through activation of multiple pro- and anti-apoptotic signaling cascades of which lipid signaling events represent an important facet of the cellular rheostat that determines survival and death decisions. Activation of sphingomyelinase, which generates ceramide, is an intermediate in cellular stress responses and induction of apoptosis in many systems. Conversely, phosphatidylinositol 3-kinase (PI3K) is a critical signaling molecule involved in regulating cell survival and proliferation pathways. In the present study, we investigate cross-talk between the PI3K and sphingomyelinase pathways as a mechanism for regulation of cell survival/death decisions. We show that phorbol ester, insulin-like growth factor 1, and a constitutively active PI3K suppress both tumor necrosis factor-induced apoptosis and ceramide generation. Conversely, inhibition of the PI3K pathway with expression of a kinase-dead PI3K both prevented survival signaling and enhanced tumor necrosis factor-induced ceramide generation. The ability of exogenous sphingomyelinase to induce ceramide generation was partially suppressed by expression of constitutively active PI3K and enhanced by inhibition of PI3K suggesting that cross-talk between PI3K and ceramide generation within cells is regulated subsequent to activation of sphingomyelinase.