Interleukin-1beta (IL-1beta) is a major inducer of liver acute-phase protein expression in response to infection. Several transcription factors, including CCAAT/enhancer binding protein (C/EBP), are known mediators in this process, although the mechanisms by which they modulate IL-1beta's action are not completely understood. Activation of sphingomyelinase (SMase) and the subsequent generation of ceramide are early steps in the IL-1beta signaling cascade. In this study, we investigate the role of ceramide in the IL-1beta regulation of C/EBP in primary hepatocytes. The C/EBP DNA binding activity was found to increase in a dose-dependent manner after stimulation with IL-1beta and exogenous addition of C2-ceramide or treatment with SMase. These changes were accompanied by an increase in the nuclear content of C/EBPbeta. Both IL-1beta and ceramide led to extracellular signal-regulated kinase 1/2 (ERK1/2) activation as early as 15 min after treatment. Furthermore, the increase of cellular ceramide content resulted in increased phosphorylation of C/EBPbeta at serine 105 at later time points. Concurrently, the cytosolic levels of C/EBPbeta decreased, suggesting that IL-1beta and ceramide induced nuclear translocation of C/EBPbeta. Ceramide-induced C/EBPbeta phosphorylation, translocation, and DNA binding were suppressed by the addition of PD98059, an inhibitor of ERK1/2 phosphorylation. These results suggest that ceramide and ERK mediate a pathway in the IL-1beta signaling cascade, which results in rapid posttranslational activation of C/EBPbeta.