The search for potential targets for ceramide action led to the identification of ceramide-activated protein phosphatases (CAPP). To date, two serine/threonine protein phosphatases, protein phosphatase 2A (PP2A) and protein phosphatase 1 (PP1), have been demonstrated to function as ceramide-activated protein phosphatases. In this study, we show that treatment with either anti-FAS IgM (CH-11) (150 ng/ml) or exogenous d-(e)-C(6-)ceramide (20 microm) induces the dephosphorylation of the PP1 substrates, serine/arginine-rich (SR) proteins, in Jurkat acute leukemia T-cells. The serine/threonine protein phosphatase inhibitor, calyculin A, but not the PP2A-specific inhibitor, okadaic acid, inhibited both FAS- and ceramide-induced dephosphorylation of SR proteins. Anti-FAS IgM treatment of Jurkat cells led to a significant increase in levels of endogenous ceramide beginning at 2 h with a maximal increase of 10-fold after 7 h. A 2-h pretreatment of Jurkat cells with fumonisin B(1) (100 microm), a specific inhibitor of CoA-dependent ceramide synthase, blocked 80% of the ceramide generated and completely inhibited the dephosphorylation of SR proteins in response to anti-FAS IgM. Moreover, pretreatment of Jurkat cells with myriocin, a specific inhibitor of serine-palmitoyl transferase (the first step in de novo synthesis of ceramide), also blocked FAS-induced SR protein dephosphorylation, thus demonstrating a role for de novo ceramide. These results were further supported using A549 lung adenocarcinoma cells treated with d-(e)-C(6-)ceramide. Dephosphorylation of SR proteins was inhibited by fumonisin B(1) and by overexpression of glucosylceramide synthase; again implicating endogenous ceramide generated de novo in regulating the dephosphorylation of SR proteins in response to FAS activation. These results establish a specific intracellular pathway involving both de novo ceramide generation and activation of PP1 to mediate the effects of FAS activation on SR proteins.