Ceramide is a sphingolipid that is generated in the signaling of inflammatory cytokines such as tumor necrosis factor (TNF), which exerts many functional roles depending on the cell type where it is produced. Since TNF cytotoxicity is mediated by overproduction of reactive oxygen species from mitochondria, we have examined the role of ceramide in generation of oxidative stress in isolated rat liver mitochondria. The present studies demonstrate that addition of N-acetylsphingosine (C2-ceramide) to mitochondria led to an increase of fluorescence of dihydrorhodamine 123 or dichlorofluorescein-stained mitochondria, indicating formation of hydrogen peroxide. Such effect was significant at 0.25 microM and maximal at 1-5 microM C2, decreasing at greater concentrations. This inductive effect of ceramide was mimicked by N-hexanoylsphingosine at the same concentration range, whereas the immediate precursor of C2, C2-dihydroceramide increased hydrogen peroxide at 1-5 microM. Sphingosine generated hydrogen peroxide at concentrations >/=10 microM, whereas diacylglycerol failed to increase hydrogen peroxide. The increase in hydrogen peroxide induced by C2 was not triggered by mitochondrial permeability transition as C2 did not induce mitochondrial swelling. Blocking electron transport chain at complex I and II prevented the increase in hydrogen peroxide induced by C2; however, interruption of electron flow at complex III by antimycin A potentiated the inductive effect of C2. Depletion of matrix GSH prior to exposure to ceramide resulted in a potentiated increase (2-fold) of hydrogen peroxide generation, leading to lipid peroxidation and loss of activity of respiratory chain complex IV compared with GSH-repleted mitochondria. Mitochondria isolated from TNF-treated cells showed an increase (2-3-fold) in the amount of ceramide compared with mitochondria from untreated cells. These results suggest that mitochondria are a target of ceramide produced in the signaling of TNF whose effect on mitochondrial electron transport chain leads to overproduction of hydrogen peroxide and consequently this phenomena may account for the generation of reactive oxygen species during TNF cytotoxicity.