The hydrolysis of sphingomyelin from cellular plasma membranes imposes many consequences on cellular cholesterol homeostasis by causing a rapid and dramatic redistribution of plasma membrane cholesterol within the cells (Slotte, J.P. and Bierman, E.L. (1988) Biochem. J. 250, 653-658). The objective of this study was to examine the effects of an extracellular cholesterol acceptor on the directions of the sphingomyelinase-induced cholesterol flow in cultured fibroblasts. We have used HDL3 as a physiological acceptor for cholesterol, and measured the effects of sphingomyelin hydrolysis on efflux and endogenous esterification of cellular [3H]cholesterol. Treatment of cells with sphingomyelinase did induce a dramatically increased esterification of plasma-membrane-derived [3H]cholesterol. The presence of HDL3 in the medium (100 micrograms/ml) did not prevent or reduce the extent of the sphingomyelinase-induced cellular esterification of [3H]cholesterol. Degradation of cellular sphingomyelin (75% hydrolysis) also did not enhance the rate of [3H]cholesterol efflux from the plasma membranes to HDL3. In addition, we also observed that the degradation of sphingomyelin in the HDL3 particles (complete degradation) did not change the apparent rate of [3H]cholesterol transfer from HDL3 to the cells. These findings together indicate that hydrolysis of sphingomyelin did not markedly affect the rates of cholesterol surface transfer between HDL3 and cells. By whatever mechanism cholesterol is forced to be translocated from the plasma membranes subsequent to the degradation of sphingomyelin, it appears that the sterol flow is specifically directed towards the interior of the cells.