The protein phosphatases1 (PP1) and 2A (PP2A) serve as ceramide-activated protein phosphatases (CAPP). In this study, the structural requirements for interaction between ceramide and CAPP were determined. D-erythro-C(6) ceramide activated the catalytic subunit of PP2A (PP2Ac) approximately 3-fold in a stereospecific manner. In contrast, saturation of the 4-5 double bond, producing D-erythro-dihydro C(6) ceramide, inhibited PP2Ac (IC(50) = 8.5 microM). Furthermore, phyto C(6) ceramide, D-erythro-dehydro C(6) ceramide, and D-erythro-cis-C(6) ceramide had no effect on PP2Ac activity. Modification of the sphingoid chain also abolished the ability of ceramide to activate PP2Ac. Further studies demonstrated the requirement for the amide group, the primary hydroxyl group, and the secondary hydroxyl group of the sphingoid backbone for activation of PP2Ac through the synthesis and evaluation of D-erythro-urea C(6) ceramide, L-erythro-urea C(6) ceramide, D-erythro-N-methyl C(6) ceramide, D-erythro-L-O-methyl C(6) ceramide, D-erythro-3-O-methyl C(6) ceramide, and (2S) 3-keto C(6) ceramide. None of these compounds induced significant activation of PP2Ac. Liposome binding studies were also conducted using analogs of D-erythro-C C(6) ceramide, and the results showed that the ability of ceramide analogs to influence CAPP (activation or inhibition) was associated with the ability of the analogs to bind to CAPP. This study demonstrates strict structural requirements for interaction of ceramide with CAPP, and disclose ceramide as a very specific regulator of CAPP. The studies also begin to define features that transform ceramide analogs into inhibitors of CAPP.