Ceramide is a bioactive lipid mediator that has been observed to induce apoptosis in vitro. The purpose of this study was to determine whether endogenous ceramide, generated in response to in vivo administration of tumor necrosis factor-α (TNF-α), increases apoptosis in primary rat alveolar type II epithelial cells. Intratracheal instillation of TNF-α (5 μg) produced a decrease in sphingomyelin and activation of a neutral sphingomyelinase. These changes were associated with a significant increase in lung ceramide content. TNF-α concomitantly activated the p42/44 extracellular signal-related kinases and induced nuclear factor-κB activation in the lung. Hypodiploid nuclei studies revealed that intratracheal TNF-α did not increase type II cell apoptosis compared with that in control cells after isolation. A novel observation from separate in vitro studies demonstrated that type II cells undergo a gradual increase in apoptosis after time in culture, a process that was accelerated by exposure of cells to ultraviolet light. However, culture of cells with a cell-permeable ceramide, TNF-α, or a related ligand, anti- CD95, did not increase apoptosis above the control level. The results suggest that ceramide resulting from TNF-α activation of sphingomyelin hydrolysis might activate the mitogen-activated protein kinase and nuclear factor-κB pathways without increasing programmed cell death in type II cells.