Acid sphingomyelinase-induced ceramide release has been shown by many studies to induce apoptosis in response to various stimuli. However, the mechanisms of acid sphingomyelinase/ceramide-mediated death signaling following treatment with chemotherapeutic drugs have not been fully elucidated thus far. The present study demonstrates that treatment of glioma cells with clinically achievable doses of gemcitabine results in acid sphingomyelinase activation, lysosomal accumulation of ceramide, cathepsin D activation, Bax insertion into the mitochondria, and cell death. Pharmacological inhibition or genetic deficiency of acid sphingomyelinase prevented these events while overexpression of the enzyme sensitized cells to gemcitabine. Likewise, inhibitors of lysosomal functions also prevent gemcitabine-induced cell death. Our data indicate a critical role of the acid sphingomyelinase/ceramide system for gemcitabine-induced signaling and suggest that lysosomal ceramide accumulation mediates cell death induced by a chemotherapeutic drug.