Farber's lipogranulomatosis is an inborn lipid storage disease characterized by tissue accumulation of ceramide due to deficient activity of lysosomal ceramidase. Symptoms include painful swelling of joints, subcutaneous nodules, a hoarse cry, hepatosplenomegaly and nervous system dysfunction of markedly variable degree. In most cases the neural dysfunction rather than the general dystrophy, seems to limit the duration of Farber disease. We examined whether the severity can be shown as a function of ceramide turnover by lysosomal ceramidase. The lysosomal degradation of sphingomyelin-derived ceramide was studied in situ in patient skin fibroblasts and lymphoid cells loaded with LDL-associated radioactive sphingomyelin. We could show for the first time a significant correlation between the ceramide accumulated in situ and the severity of Farber disease. Our method provides an alternative means for determining ceramide degradation by lysosomal ceramidase, but in intact cells. The relatively simple method is at least of the same diagnostic use for Farber disease as the in vitro assay of acid ceramidase using cell homogenates and may also have some prognostic use.