Ceramide mediates differentiation, growth arrest, apoptosis, proliferation, cytokine biosynthesis and secretion, and a variety of other cellular functions. However, little is known regarding ceramide signaling linked to the cell cycle. In the present study, the effect of ceramide on cell cycle in nasopharyngeal carcinoma cell line CNE2 was investigated. The results showed that ceramide inhibited cell proliferation and induced cell cycle arrest in G1 phase in CNE2 cells. Exposure of CNE2 cells to ceramide resulted in a dose-dependent up-regulation of the cyclin-dependent kinase inhibitor p27 and a decrease of phospho-Akt without reduced expression of total AKT protein. The activation of phosphatidylinositol-3-kinase (PI3K) and the protein expression of PTEN were unaffected following ceramide treatment. We concluded that ceramide induced cell cycle arrest in G1 phase in CNE2 cells and p27 up-regulation was involved in this process. In addition, up-regulation of p27 resulting from ceramide treatment may be due to the interruption of Akt, but decrease of phospho-Akt is independent of PI3K function or PTEN protein expression.