The role of the low-affinity neurotrophin receptor (p75(NTR)) in signal transduction is undefined. Nerve growth factor can activate the sphingomyelin cycle, generating the putative-lipid second messenger ceramide. In T9 glioma cells, addition of a cell-permeable ceramide analog mimicked the effects of nerve growth factor on cell growth inhibition and process formation. This signaling pathway appears to be mediated by p75(NTR) in T9 cells and NIH 3T3 cells overexpressing p75(NTR). Expression of an epidermal growth factor receptor-p75(NTR) chimera in T9 cells imparted to epidermal growth factor the ability to activate the sphingomyelin cycle. These data demonstrate that p75(NTR) is capable of signaling independently of the trk neurotrophin receptor (p140(trk)) and that ceramide may be a mediator in neurotrophin biology.