Plasma-membrane sphingomyelin appears to be one of the major determinants of the preferential allocation of cell cholesterol into the plasma-membrane compartment, since removal of sphingomyelin leads to a dramatic redistribution of cholesterol within the cell [Slotte & Bierman (1988) Biochem. J. 250, 653-658]. In the present study we examined the long-term effects of sphingomyelin degradation on cholesterol redistribution in cells and determined the reversibility of the process. In a human lung fibroblast-cell line, removal of 80% of the sphingomyelin led to a rapid and transient up-regulation (3-fold) of acyl-CoA:cholesterol acyltransferase (ACAT) activity, and also, within 30 h, to the translocation of about 50% of the cell non-esterified cholesterol from a cholesterol oxidase-susceptible compartment (i.e. the cell surface) to oxidase-resistant compartments. At 49 h after the initial sphingomyelin degradation, the cell sphingomyelin level was back to 45% of the control level, and the direction of cell cholesterol flow was toward the cell surface, although the original distribution was not achieved. In a transformed neuroblastoma cell line (SH-SY5Y), the depletion of sphingomyelin led to a similarly rapid and transient up-regulation of ACAT activity, and to the translocation of about 25% of cell-surface cholesterol into internal membranes (within 3 h). The flow of cholesterol back to the cholesterol oxidase-susceptible pool was rapid, and a pretreatment cholesterol distribution was reached within 20-49 h. Also, the resynthesis of sphingomyelin was faster in SH-SY5Y neuroblastoma cells and reached control levels within 24 h. The findings of the present study show that the cellular redistribution of cholesterol, as induced by sphingomyelin degradation, is reversible and suggest that the normalization of cellular cholesterol distribution is linked to the re-synthesis of sphingomyelin.