Despite the importance of prostaglandins, little is known about the regulation of prostanoid synthesis proximal to the activation of cytosolic phospholipase A2, the initial rate-limiting step. In this study, ceramide-1-phosphate (C-1-P) was shown to be a specific and potent inducer of arachidonic acid (AA) and prostanoid synthesis in cells. This study also demonstrates that two well established activators of AA release and prostanoid synthesis, the cytokine, interleukin-1beta (IL-1beta), and the calcium ionophore, A23187, induce an increase in C-1-P levels within the relevant time-frame of AA release. Furthermore, the enzyme responsible for the production of C-1-P in mammalian cells, ceramide kinase, was activated in response to IL-1beta and A23187. RNA interference targeted to ceramide kinase specifically down-regulated ceramide kinase mRNA and activity with a concomitant decrease of AA release in response to IL-1beta and A23187. Down-regulation of ceramide kinase had no effect on AA release induced by exogenous C-1-P. Collectively, these results indicate that ceramide kinase, via the formation of C-1-P, is an upstream modulator of phospholipase A2 activation. This study identifies previously unknown roles for ceramide kinase and its product, C-1-P, in AA release and production of eicosanoids and provides clues for potential new targets to block inflammatory responses.