Sphingolipid ceramide N-deacylase catalyzes a reversible reaction in which the amide linkages of the ceramides of various sphingolipids are cleaved or synthesized. Hydrolysis of sphingolipids by the enzyme proceeded efficiently at acidic pH in the presence of high concentrations of detergents, whereas the reverse reaction tended to be favored at neutral pH with a decrease in the detergent concentration. Although the catalytic efficiency (V(max)/K(m)) of the hydrolysis and reverse reactions was changed mainly by the concentration of detergents in the reaction mixture, V(max) and K(m) for the reverse reaction were relatively higher than those for the forward reaction, irrespective of the detergent concentration. The reverse reaction proceeded most efficiently when the molar ratio of lyso-sphingolipids and fatty acids was fixed at 1 : 1-2, the yield of the reaction exceeding 70-80%. The reverse and exchange (transacylation) reactions did not require ATP, CoA, metal ions or addition of organic solvents. Studies using inhibitors and chemical modifiers of the enzyme protein suggested that both the hydrolysis and condensation reactions are catalyzed at the same catalytic domain. These results indicate that the reverse hydrolysis reaction of the enzyme is unique, being completely different from those of lipases, proteases and glycosidases reported to date.