We previously reported that exposure of human airway epithelial cells to oxidative stress increased ceramide generation via specific activation of neutral sphingomyelinase2 (nSMase2). Here we show that nSMase2 is a phosphoprotein exclusively phosphorylated at serine residues. The level of nSMase2 phosphorylation can be modulated by treatment with anisomycin or phorbol 12-myristate 13-acetate (PMA/12-O-tetradecanoylphorbol-13-acetate), suggesting that p38 mitogen-activated protein kinase (MAPK) and protein kinases Cs are upstream of nSMase2 phosphorylation. Oxidative stress enhances both the activity and phosphorylation of nSMase2. Strikingly, we show here that nSMase2 is bound directly by the phosphatase calcineurin (CaN), which acts as an on/off switch for nSMase2 phosphorylation in the presence or absence of oxidative stress. Specifically, CaN is being inhibited/degraded and therefore does not bind nSMase2 under oxidative stress, and a mutant nSMase2 that lacks the CaN binding site exhibits constitutively elevated phosphorylation and increased activity relative to wild type nSMase2. Importantly, the phosphorylation and activity of the mutant no longer responds to oxidative stress, confirming that CaN is the critical link that allows oxidative stress to modulate nSMase2 phosphorylation and function.