We previously reported that exposure of human airway epithelial cells to oxidative stress increased ceramide generation via specific activation of neutral sphingomyelinase2 (nSMase2). Here we show that nSMase2 is a phosphoprotein exclusively phosphorylated at serine residues. The level of nSMase2 phosphorylation can be modulated by treatment with anisomycin or phorbol 12-myristate 13-acetate (PMA/12-O-tetradecanoylphorbol-13-acetate), suggesting that p38 mitogen-activated protein kinase (MAPK) and protein kinases Cs are upstream of nSMase2 phosphorylation. Oxidative stress enhances both the activity and phosphorylation of nSMase2. Strikingly, we show here that nSMase2 is bound directly by the phosphatase calcineurin (CaN), which acts as an on/off switch for nSMase2 phosphorylation in the presence or absence of oxidative stress. Specifically, CaN is being inhibited/degraded and therefore does not bind nSMase2 under oxidative stress, and a mutant nSMase2 that lacks the CaN binding site exhibits constitutively elevated phosphorylation and increased activity relative to wild type nSMase2. Importantly, the phosphorylation and activity of the mutant no longer responds to oxidative stress, confirming that CaN is the critical link that allows oxidative stress to modulate nSMase2 phosphorylation and function.We have shown that ceramide generation coordinates stress responses and is elevated in HAE cells in response to reactive oxygen species (1-8).Ceramide is synthesized through either a de novo pathway involving serine palmitoyl-CoA transferase and ceramide synthase, or from breakdown of membrane sphingomyelin (N-acylsphingosine-1-phosphocholine) (Fig. 1A), a phospholipid preferentially concentrated in the plasma membrane of mammalian cells (9). Sphingomyelin catabolism occurs via the action of sphingomyelinases (SMases), 3 which are sphingomyelin-specific forms of phospholipase C that hydrolyze the phosphodiester bond of sphingomyelin, yielding ceramide and phosphorylcholine. Ceramide then serves as a second messenger, leading to apoptotic DNA degradation.We suggested that reactive oxidants up-regulate ceramide generation and cause elevated apoptosis in human airway epithelial (HAE) cells, thereby leading to lung injury pathologies. However, the mechanisms and target molecules of reactive oxidants affecting the HAE cells are not fully understood. Therefore, we proposed that increased oxidative stress and elevated ceramide generation are coupled at the molecular level by an unknown SMase that generates ceramide by hydrolysis of sphingomyelin (Fig. 1B). To proceed from the cellular to the molecular level, we searched for the specific SMase that is modulated by reactive oxygen species in lung epithelial cells, which led to our isolation of the novel nSMase2 from monkey lung tissue and HAE cells (1). This nSMase2 was previously found in the brain (10).We then demonstrated that nSMase2 is the only member of the sphingomyelin phosphodiesterases family that is up-regulated and responsible for ceramide generation in HAE cells ...