Signal transduction for tumor necrosis factor-alpha and interleukin-1 involves sphingomyelin hydrolysis to ceramide and stimulation of a ceramide-activated serine/threonine protein kinase (Mathias, S., Younes, A., Kan, C., Orlow, I., Joseph, C., and Kolesnick, R. (1993) Science 259, 519-522). Kinase activity is detected by phosphorylation of a 19-amino acid peptide derived from the sequence surrounding Thr669 of the epidermal growth factor receptor. Thr669 is contained within a -Pro-Leu-Thr-Pro- motif, which conforms to a known recognition sequence for the proline-directed class of serine/threonine protein kinases. The present studies used peptides with single-site amino acid substitutions within this sequence to assess substrate recognition by ceramide-activated protein kinase. Substitution of alanine for the C-terminal but not the N-terminal proline reduced kinase activity by 80%. Similarly, substitution of basic residues for the leucine residue reduced kinase activity by 90%. Substitution of acidic residues for leucine, or its removal, also markedly reduced kinase activity. Surprisingly, addition of a leucine residue between threonine and the C-terminal proline enhanced kinase activity 3-4 fold. The Vmax(app) of the enzyme toward the control peptide containing -Pro-Leu-Thr-Pro- (200 +/- 11 pmol of peptide phosphorylated/min/mg of membrane protein) was enhanced 2.3-fold by ceramide. However, ceramide had no effect on the Km (2.0 +/- 0.4 mM). Membranes containing ceramide-activated protein kinase showed minimal activity toward peptides derived from substrates for casein kinase II, S6 kinase, protein kinase C, and cAMP-dependent protein kinase, but possessed substantial activity toward a calmodulin kinase substrate. However, activities toward these substrates were not enhanced by ceramide. These results suggest that ceramide-activated protein kinase may be a member of the proline-directed class of protein kinases and display specificity for -Leu-Thr-Pro- as a minimal substrate recognition motif.