Pulse-chase experiments showed that phosphatidylethanolamine (PE) was the direct precursor for ceramide-phosphoethanolamine, a sphingomyelin analogue, in the same way as phosphatidylcholine was for sphingomyelin. Ceramide-phosphoethanolamine could be identified by incorporation of radioactivity from labeled PE, as well as by its stability in alkaline methanolysis and its ability to be methylated by S-adenosyl-methionine. Ceramide-phosphoethanolamine synthesis from labeled exogenous PE seemed to be independent of exogenous ceramide; it was proportional to the amount of incubated membrane, when taking into account the isotopic dilution of labeled precursor by endogenous PE. Sphingomyelin synthesis, which was demonstrated using natural PC as a substrate, was not possible using dipalmitoyl-PC. The formation of sphingomyelin and ceramide-phosphoethanolamine was demonstrated in microsomes and plasma membranes from rat brain and liver.