Macrophage-derived apolipoprotein E (apoE) in the vessel wall has important effects on the vessel-wall response to atherogenic injury. The current studies characterize a novel post-transcriptional pathway for the regulation of apoE secretion from macrophages. Treatment of J774 macrophages transfected to constitutively express a human apoE3 cDNA (to constitutively secrete a physiologic level of apoE) with sphingomyelinase led to a reduction of apoE secretion by nearly 50%. Increasing cellular ceramide by inhibiting ceramide degradation or by the direct treatment of cells with exogenous ceramide also reduced apoE secretion without a concomitant increase in cellular retention of newly synthesized apoE. Reducing cellular sphingomyelin (SM) by inhibiting its synthesis also reduced apoE secretion, but in this case, reduced apoE secretion was accompanied by increased cellular retention of apoE. The effect of sphingomyelin depletion to decrease apoE secretion and increase its cellular retention was dependent upon the presence of intact C-terminal amphipathic lipid-binding domains in apoE. ApoE expression also increased sphingomyelin secretion from macrophages, and this sphingomyelin was co-localized with apoE in secreted lipoprotein particles. The importance of sphingomyelin for apoE secretion and cell retention was confirmed using a Chinese hamster ovary model, in which cellular sphingolipids (both ceramide and sphingomyelin) are reduced secondary to absent serine palmitoyltransferase activity. Our results show that cellular sphingolipids, ceramide and sphingomyelin, have important effects on the post-transcriptional handling of nascent apoE by macrophages. Increased cellular ceramide reduces apoE secretion without increased cell retention, consistent with enhanced degradation of newly synthesized apoE. Reduction of cell SM also reduces apoE secretion, but this is associated with increased cellular retention of newly synthesized apoE. The dependence for this effect on the C-terminal domain of apoE suggests a model in which the SM content of intracellular membranes modulates the secretion of nascent apoE via the interaction with amphipathic lipid-binding domains.