Sphingolipids play key roles in cancer, yet our current understanding of sphingolipid function in lung cancer is limited to a few key players. The best characterized of these are sphingosine-1-phoshate and ceramide which are described for their opposing roles in cell fate. However, because sphingolipids as a whole are readily interconverted by a complex enzymatic machinery, no single sphingolipid appears to have exactly one role. Instead, the roles of specific sphingolipids appear to be context specific as demonstrated by findings that ceramide-1-phosphate has both proliferative and apoptotic effects depending on its concentration. Therefore, we present herein several years of research on ceramide, a sphingolipid linked to apoptotic signaling, that is emerging in cancer research for its potential roles in proliferation and cell-to-cell communication via exosomes. Ceramide is a well-studied sphingolipid in both normal and pathological conditions ranging from skin development to lung cancer. Interestingly, several groups have previously reported its increased levels in emphysema patients who are smokers, a patient subpopulation greatly susceptible to lung cancer. However, the molecular mechanisms through which cigarette smoke (CS) and ceramide accumulation lead to lung cancer, non-small cell lung cancer (NSCLC) specifically, are unknown. Interestingly, recent studies clearly establish that two signaling pathways are activated during CS exposure in the lung airway. One centers on the activation of neutral sphingomyelinase2 (nSMase2), an enzyme that hydrolyzes sphingomyelin to ceramide. The other pathway focuses on the oncogenic EGF receptor (EGFR), which becomes aberrantly activated but not degraded, leading to prolonged proliferative signaling. Recent studies show that these two signaling pathways may actually converge and integrate. Specifically, Goldkorn et al. demonstrated that during CS exposure, EGFR is favorably co-localized in ceramide-enriched regions of the plasma membrane, proposing that nSMase2/ceramide plays a role in the aberrant EGFR activation, leading to augmented tumorigenic signaling. Moreover, new findings indicate that CS exposure may induce resistance to the tyrosine kinase inhibitors (TKIs), used for treatment of NSCLC, merely through posttranslational molecular alterations. Furthermore, structural anomalies of the CS-activated EGFR appear to be supported by the excess ceramide produced by the CS-activated nSMase2 in the plasma membrane of lung epithelial cells. We present in this chapter the progression of the sphingolipid field in lung cancer using ceramide as an example. However, many crucial questions remain to be answered regarding the role of sphingolipids in lung cancer because of the glut of promising observations.