Homogenates of bovine adrenal medullae hydrolyzed exogenous sphingomyelin at 4.3 +/- 1.6 nmol X mg-1 X min-1 and 97% of this sphingomyelinase activity was sedimentable at 110,000 g. The sphingomyelinase had a broad pH optimum centered at pH 7. Enzymatic activity was maximal with 80 microM added Mn2+; Mg2+ supported less than half maximal activity and both Ca2+ and EDTA inhibited activity. No activity was detected in the absence of Triton X-100. Response to detergent was biphasic with dose-dependent stimulation from 0.02% to 0.05% Triton X-100 followed by inhibition with increasing concentrations of detergent. Activity in response to detergent was also modulated by protein concentration. Sphingomyelinase activity was associated with a plasma membrane-microsomal fraction. Phosphatidylcholine was not hydrolyzed under optimal conditions for sphingomyelin hydrolysis and a variety of other conditions. Neutral-active sphingomyelinase activity in adrenal medulla was similar in magnitude to that observed in other non-neural bovine tissues. This study demonstrates the presence of a potent neutral-active sphingomyelinase in a plasma membrane-microsomal fraction of bovine adrenal medulla. This enzyme may be involved in membrane fusion and lysis during catecholamine secretion through its ability to alter membrane composition.