Mammalian sialidase Neu4, ubiquitously expressed in human tissues, is located in the lysosomal and mitochondrial lumen and has broad substrate specificity against sialylated glycoconjugates. To investigate whether Neu4 is involved in ganglioside catabolism, we transfected beta-hexosaminidase-deficient neuroglia cells from a Tay-Sachs patient with a Neu4-expressing plasmid and demonstrated the correction of storage due to the clearance of accumulated GM2 ganglioside. To further clarify the biological role of Neu4, we have generated a stable loss-of-function phenotype in cultured HeLa cells and in mice with targeted disruption of the Neu4 gene. The silenced HeLa cells showed reduced activity against gangliosides and had large heterogeneous lysosomes containing lamellar structures. Neu4(-/-) mice were viable, fertile and lacked gross morphological abnormalities, but showed a marked vacuolization and lysosomal storage in lung and spleen cells. Lysosomal storage bodies were also present in cultured macrophages preloaded with gangliosides. Thin-layer chromatography showed increased relative level of GD1a ganglioside and a markedly decreased level of GM1 ganglioside in brain of Neu4(-/-) mice suggesting that Neu4 may be important for desialylation of brain gangliosides and consistent with the in situ hybridization data. Increased levels of cholesterol, ceramide and polyunsaturated fatty acids were also detected in the lungs and spleen of Neu4(-/-) mice by high-resolution NMR spectroscopy. Together, our data suggest that Neu4 is a functional component of the ganglioside-metabolizing system, contributing to the postnatal development of the brain and other vital organs.