The treatment of HL-60 myelocytic leukemia cells with 1 alpha,25-dihydroxyvitamin D3 (1,25-(OH)2D3) resulted in the activation of a neutral sphingomyelinase and in sphingomyelin turnover (Okazaki, T., Bell, R., and Hannun, Y. (1989) J. Biol. Chem. 264, 19076-19080). In this paper, the effects of 1,25-(OH)2D3 on the product of sphingomyelin hydrolysis, ceramide, and the possible function of ceramide as a lipid mediator of the effects of 1,25-(OH)2D3 on HL-60 cell differentiation were investigated. Treatment of HL-60 cells with 1,25-(OH)2D3 resulted in a time- and dose-dependent increase in ceramide mass levels. Ceramide levels peaked at 2 h following treatment of HL-60 cells with 100 nM 1,25-(OH)2D3 with an increase of 41% over base line. The mass of generated ceramide (13 +/- 2 pmol/nmol of phospholipid) agreed with the mass of hydrolyzed sphingomyelin (17 +/- 4 pmol/nmol of phospholipid). Cell-permeable ceramides with shorter N-acyl chains induced HL-60 cell differentiation at subthreshold concentrations of 1,25-(OH)2D3. Higher concentrations of cell-permeable ceramides potently induced HL-60 cell differentiation independent of 1,25-(OH)2D3. A 2-h exposure of HL-60 cells to N-acetyl-sphingosine was sufficient to cause differentiation. Morphologically, N-acetylsphingosine caused a similar monocytic differentiation of HL-60 cells as did 1,25-(OH)2D3. Exogenous ceramide was further metabolized to sphingomyelin and other sphingolipids, but no conversion to sphingosine was detected. Moreover, sphingosine and its analogs failed to affect monocytic differentiation of HL-60 cells in response to subthreshold 1,25-(OH)2D3, indicating that the effect of ceramide was independent of sphingosine generation. These studies demonstrate that ceramide is a lipid mediator that may transduce the action of 1,25-(OH)2D3 on HL-60 cell differentiation.