Abstract The overall goals of this research proposal are to define specific pathways of sphingolipid metabolism, define specific roles, define mechanisms, and help place the field of bioactive lipids on solid mechanistic grounds. Based on strong ongoing data, we propose the overall hypothesis that individual enzymes of ceramide metabolism serve as transducers of specific inputs, and the product bioactive sphingolipids function to mediate key responses. This proposal will develop this paradigm in the case of the DNA damage response and other stimuli activating mammalian and yeast neutral sphingomyelinases in distinct compartments leading to formation of compartmentalized and species-specific ceramides. We propose the following major goals: 1. Advance our understanding of structure and activation of nSMase2; 2. Develop tools and approaches to probe compartment-specific functions of bioactive sphingolipids and neutral sphingomyelinases; 3. Define functions and mechanisms of neutral sphingomyelinases in the nucleus, especially in the DNA Damage Response; and 4. Define mechanisms of regulation of protein phosphatases by ceramides. Taken together, we endeavor to advance our understanding of bioactive sphingolipids and reduce the complexities of the field to manageable and specific components that promise to shed important light on how these specific pathways function, and their specific roles in stress responses. The ongoing results are defining totally unexpected roles for neutral sphingomyelinases in distinct compartments, including the eukaryotic DNA damage response through a nuclear lipid-mediated pathway. These are critical towards the understanding of human disease (cancer) and therapeutics.