Tumor necrosis factor-alpha (TNF-alpha) exerts pleiotropic biologic effects. Although TNF-alpha appears to activate a number of signal transduction pathways, the role of second messengers in mediating the different effects of TNF-alpha are not well defined. In this study, we investigated the role of ceramide as an intracellular mediator of TNF-alpha action. In Jurkat T cells, TNF-alpha caused early activation of the sphingomyelin cycle with peak hydrolysis of sphingomyelin observed at 30 min following addition of TNF-alpha. In this cell line, TNF-alpha caused potent activation of nuclear factor-kappa B (NF-kappa B) and exerted potent cytostatic/cytocidal activity. C2-ceramide mimicked the effects of TNF-alpha on cell growth in a dose-dependent manner, but C2-ceramide was unable to induce activation of NF-kappa B under multiple conditions investigated. C2-ceramide, however, enhanced activation of NF-kappa B in response to TNF-alpha with peak effects observed at a concentration of C2-ceramide of 5 microM. Thus, ceramide functions as a selective mediator of the cytostatic/cytotoxic effects of TNF-alpha and plays a positive feedback role in activation of NF-kappa B. TNF-alpha signaling, therefore, involves multiple second-messenger pathways that function independently or coordinately to transduce distinct functions of TNF-alpha.