In this study, the inhibitor 2 of protein phosphatase 2A (I2PP2A) was identified in vitro and in situ as a ceramide-binding protein, which exhibits stereoisomer specificity and fatty acid chain length preference. Site- directed mutagenesis coupled with structural details of I2PP2A suggested that VIK 207-209 residues localized on helix 7 are important for ceramide binding and single mutation of K209D altered this interaction. Notably, I2PP2A-ceramide binding decreased the association between PP2A and the inhibitor, preventing the inhibition of PP2A activity in vitro. In addition, studies in A549 human lung cancer cells revealed that ceramide mediates c-Myc degradation via its PP2A-dependent dephosphorylation at S62, and treatment with okadaic acid and expression of c-Myc mutants with S62A or S62D conversions resulted in resistance to ceramide-mediated degradation. Importantly, whereas down-regulation of I2PP2A enhanced PP2A-mediated c-Myc degradation in response to ceramide, ectopic expression of wild-type I2PP2A but not of its K209D mutant protected this degradation in A549 cells. Moreover, expression of wild-type I2PP2A prevented the growth-inhibitory effects of ceramide both against A549 cells and xenograft-driven tumors in situ and in vivo compared with that in controls. Thus, these results suggest that direct interaction of I2PP2A with ceramide plays important biological roles via the regulation of PP2A activity and signaling, which in turn control ceramide-mediated degradation of c-Myc and antiproliferation.