The enzyme sphingomyelinase (sphingomyelin phosphorylcholine phosphohydrolase, E.C.3.1.4.12) which hydrolyzes sphingomyelin to ceramide (N-acylsphingosine) and phosphorylcholine was identified in the subcellular fractions of pig and human epidermis. The enzyme has an optimum pH of 4.5 to 5 and is activated by Triton X- 100 (0.1% w/v). Approximately two-thirds of the enzyme activity in both the pig and human epidermal homogenates was in the soluble subcellular fraction and more than half of the enzyme activity in the subcellular particulate fraction was solubilized by freeze-thawing. The pH optimum suggests that epidermal sphingomyelinase is probably a lysozomal enzyme. The enzymes in both pig and human epidermis exhibited Michaelis-Menten kinetics. The soluble sphingomyelinase in pig epidermis had an apparent Km, 4.5 × 10^-5 M and that in human epidermis an apparent Km, 7.7 × 10^-5 M. The pig epidermal sphingomyelinase had no special requirement for either divalent or heavy metal ions and was not inhibited by sulfydryl group-blocking agents but it was moderately inhibited by dithiothreitol. No evidence was found in either pig or human epidermis for the presence of a phospholipase C (E.C.3.1.4.3) which hydrolyzes phosphatidylcholine to diglyceride and phosphorylcholine but there was suggestive evidence of another catabolic pathway for phosphatidylcholine.