Dopaminergic (DA) neurons in the ventral midbrain selectively degenerate in Parkinson's disease (PD) in part because their oxidative environment in the substantia nigra (SN) may render them vulnerable to neuroinflammatory stimuli. Chronic inhibition of soluble Tumor Necrosis Factor (TNF) with dominant-negative TNF inhibitors protects DA neurons in rat models of parkinsonism, yet the molecular mechanisms and pathway(s) that mediate TNF toxicity remain(s) to be clearly identified. Here we investigated the contribution of ceramide sphingolipid signaling in TNF-dependent toxicity. Ceramide dose-dependently reduced the viability of DA neuroblastoma cells and primary DA neurons and pharmacological inhibition of sphingomyelinases (SMases) with three different inhibitors during TNF treatment afforded significant neuroprotection by attenuating increased endoplasmic reticulum (ER) stress, loss of mitochondrial membrane potential, caspase-3 activation and decreases in Akt phosphorylation. Using lipidomics mass spectrometry we confirmed that TNF treatment not only promotes generation of ceramide, but also leads to accumulation of several atypical deoxy-sphingoid bases (DSBs). Exposure of DA neuroblastoma cells to atypical DSBs in the micromolar range reduced cell viability and inhibited neurite outgrowth and branching in primary DA neurons, suggesting that TNF-induced de novo synthesis of atypical DSBs may be a secondary mechanism involved in mediating its neurotoxicity in DA neurons. We conclude that TNF/TNFR1-dependent activation of SMases generates ceramide and sphingolipid species that promote degeneration and caspase-dependent cell death of DA neurons. Ceramide and atypical DSBs may represent novel drug targets for development of neuroprotective strategies that can delay or attenuate the progressive loss of nigral DA neurons in patients with PD.