Intact brain and brain homogenates readily form free fatty acids and ceramides, even in the cold during subcellular isolation procedures. The fatty acid formation is slightly stimulated by chelators and might be due to phospholipid hydrolysis by lysosomal phospholipases. The ceramide formation is accompanied by loss of sphingomyelin and is apparently due to the action of neutral, metal ion-activated sphingomyelinase. The latter reaction is inhibited by EDTA whereas both degradative processes are inhibited by mercuriphenylsulfonate, the thiol-reacting inhibitor. Cerebroside does not seem to be a source of accumulated ceramide.