Alkaline sphingomyelinase (alk-SMase) is expressed in the intestine and human liver. It may inhibit colonic tumorigenesis, and loss of function mutations have been identified in human colon cancer. The present study investigates its expression in human liver cancer. In HepG2 liver cancer cells, RT–PCR identified three transcripts with 1.4, 1.2 and 0.4 kb, respectively. The 1.4 kb form is the wild-type cDNA with five translated exons, the 1.2 kb product lacks exon 4 and the 0.4 kb form is a combination of exons 1 and 5. Genomic sequence showed that these aberrant transcripts were products of alternative splicing. Transient expression of the 1.2 kb form showed no alk-SMase activity. In HepG2 cells, the alk-SMase activity is low in monolayer condition and increased with cell polarisation. Coexistence of 1.4 and 1.2 kb forms was also identified in one hepatoma biopsy. GenBank search identified a cDNA clone from human liver tumour, which codes a protein containing full length of alk-SMase plus a 73-amino-acid tag at the N terminus. The aberrant form was translated by an alternative starting codon upstream of the wild-type mRNA. Expression study showed that linking the tag markedly reduced the enzyme activity. We also analysed human liver biopsy samples and found relatively low alk-SMase activity in diseases with increased risk of liver tumorigenesis. In conclusion, expression of alk-SMase is changed in hepatic tumorigenesis, resulting in loss or marked reduction of the enzyme function.