Ceramide 1-phosphate (C1P) has been characterized as a sphingolipid that participates in cell signaling. Although C1P synthesis is thought to occur via phosphorylation of ceramide by ceramide kinase (CerK), the processes that regulate C1P formation and fate remain largely unknown. In this study we analyzed bone marrow-derived macrophages (BMDM) from CerK-null mice (Cerk ؊/؊ ) and found significant levels of C1P, suggesting that previously unrecognized pathways may also lead to C1P formation. After these experiments we used an overexpression system, BMDM from Cerk ؊/؊ mice, and short-chain fluorescent ceramides to trace CerK-dependent formation of C1P. Because the ceramide analogs can also be converted to glucosylceramide (GlcCer) and sphingomyelin (SM), they allowed us to directly compare all three metabolites. We found that C1P produced by CerK is turned over rapidly when serum is removed or upon calcium chelation, whereas GlcCer and SM are stable under these conditions. We further demonstrated that ceramide must be transported to the Golgi complex to be phosphorylated by CerK. Inhibition of the ceramide transfer protein slowed down SM formation without decreasing C1P, suggesting an alternate route of ceramide transport. Other experiments indicated that, like GlcCer and SM, C1P traffics along the secretory pathway to reach the plasma membrane. Furthermore, in BMDM C1P was secreted more readily than was GlcCer or SM. Altogether, our results indicate that CerK is essential to C1P formation via phosphorylation of Cer, providing the first insights into mechanisms underlying ceramide access to CerK and C1P trafficking as well as clarifying C1P as a signaling entity.