The activity of the neutral, Mg2+-stimulated sphingomyelinase of cultured neuroblastoma cells (N1E-115) is enriched in the plasma membrane fraction and is reduced following treatment of intact or broken cells with trypsin, alpha-chymotrypsin, papain, and protease. Two protease-sensitive enzymes of the cell interior (lactate dehydrogenase and NADPH-cytochrome c reductase) are not affected by protease treatment of intact cells. These results indicate that the neutral, Mg2+-stimulated sphingomyelinase is oriented externally on the plasma membrane of the cultured neuroblastoma cell.