This study examines the relationship between cellular sphingomyelin content and the distribution of unesterified cholesterol between the plasma-membrane pool and the putative intracellular regulatory pool. The sphingomyelin content of cultured human skin fibroblasts was reduced by treatment of intact cells with extracellularly added neutral sphingomyelinase, and subsequent changes in the activities of cholesterol-metabolizing enzymes were determined. Exposure of fibroblasts to 0.1 unit of sphingomyelinase/ml for 60 min led to the depletion of more than 90% of the cellular sphingomyelin, as determined from total lipid extracts. In a time-course study, it was found that within 10 min of the addition of sphingomyelinase to cells, a dramatic increase in acyl-CoA:cholesterol acyltransferase activity could be observed, whether measured from the appearance of plasma membrane-derived [3H]cholesterol or exogenously added [14C]oleic acid, in cellular cholesteryl esters. In addition, the cholesteryl ester mass was significantly higher in sphingomyelin-depleted fibroblasts at 3 h after exposure to sphingomyelinase compared with that in untreated fibroblasts [7.1 +/- 0.4 nmol of cholesterol/mg equivalents of esterified cholesterol compared with 4.2 +/- 0.1 nmol of cholesterol/mg equivalents of cholesteryl ester in control cells (P less than 0.05)]. The sphingomyelin-depleted cells also showed a reduction in the rate of endogenous synthesis of cholesterol, as measured by incorporation of sodium [14C]acetate into [14C]cholesterol. These results are consistent with a rapid movement of cholesterol from sphingomyelin-depleted plasma membranes to the putative intracellular regulatory pool of cholesterol. This mass movement of cholesterol away from the plasma membranes presumably resulted from a decreased capacity of the plasma membranes to solubilize cholesterol, since sphingomyelin-depleted cells also had a decreased capacity to incorporate nanomolar amounts of [3H]cholesterol from the extracellular medium, as compared with control cells. These findings confirm previous assumptions that the membrane sphingomyelin content is an important determinant of the overall distribution of cholesterol within intact cells.