Ceramidases deacylate ceramides, important intermediates in the metabolic pathway of sphingolipids. In this study, we report the cloning and characterization of a novel mouse alkaline ceramidase (maCER1) with a highly restricted substrate specificity. maCER1 consists of 287 amino acids, and it has a 28 and 32% identity to the Saccharomyces alkaline ceramidases (YPC1p and YDC1p) and the human alkaline phytoceramidase, respectively. Reverse transcriptase-PCR analysis demonstrated that maCER1 was predominantly expressed in skin. maCER1 was localized to the endoplasmic reticulum as revealed by immunocytochemistry. In vitro biochemical characterization determined that maCER1 hydrolyzed D-erythro-ceramide exclusively but not D-erythro-dihydroceramide or D-ribo-phytoceramide. Similar to other alkaline ceramidases, maCER1 had an alkaline pH optimum of 8.0, and it was activated by Ca2+ but inhibited by Zn2+,Cu2+, and Mn2+. maCER1 was also inhibited by sphingosine, one of its products. Metabolic labeling studies showed that overexpression of maCER1 caused a decrease in the incorporation of radiolabeled dihydrosphingosine into ceramide and complex sphingolipids but led to a concomitant increase in sphingosine-1-P (S1P) in HeLa cells. Mass measurement showed that overexpression of maCER1 selectively lowered the cellular levels of D-erythro-C24:1-ceramide, but not other ceramide species and caused an increase in the levels of S1P. Taken together, these data suggest that maCER1 is a novel alkaline ceramidase with a stringent substrate specificity and that maCER1 is selectively expressed in skin and may have a role in regulating the levels of bioactive lipids ceramide and S1P, as well as complex sphingolipids.