The cytokine interleukin-1 (IL-1) is an important mediator of neuroimmune interactions, though it has not been established precisely how the IL-lbeta signal is transmitted in nerve cells. This study demonstrates the involvement of the sphingomyelin cascade in IL-1beta signal transduction in the P2 membrane fraction of the mouse cerebral cortex. The key role of the membrane enzyme neutral sphingomyelinase in initiating the sphingomyelin signal transduction pathway for this cytokine is supported. The stimulating activity of IL-1beta on sphingomyelinase activity in the P2 fraction of the cerebral cortex was found to be dose-dependent. Studies using this membrane fraction from mice lacking the IL-1 type I receptor due to genomic mutations, along with studies using an IL-1 receptor antagonist. yielded data showing that IL-1beta binding with the type I receptor is a necessary event for activation of neutral sphingomyelinase. The results obtained here lead to the conclusion that the action of IL-1beta in the CNS is mediated by the IL-1 type I receptor and activation of neutral sphingomyelinase as the initiating enzyme of the sphingomyelin cascade.