Ceramide has been implicated as a mediator of insulin resistance induced by tumor necrosis factor-a (TNF) in adipocytes. Adipocytes contain numerous caveolae, sphingolipid and cholesterol-enriched lipid microdomains, that are also enriched in insulin receptor (IR). Since caveolae may be important sites for crosstalk between tyrosine kinase and sphingolipid signaling pathways, we examined the role of increased caveolar pools of ceramide in regulating tyrosine phosphorylation of the IR and its main substrate, insulin receptor substrate-1 (IRS-1). Neither exogenous short-chain ceramide analogs nor pharmacologic increases in endogenous caveolar pools of ceramide inhibited insulin-induced tyrosine phosphorylation of the IR and IRS-1. However, inhibition of TNF-induced caveolar ceramide production reversed the decrease in IR tyrosine phosphorylation in response to TNF. These results suggest that TNF-independent increases in caveolar pools of ceramide are not sufficient to inhibit insulin signaling but that in conjunction with other TNF-dependent signals, caveolar pools of ceramide are a critical component for insulin resistance by TNF.