Sphingomyelin hydrolysis in the gut has implications in colonic tumorigenesis and cholesterol absorption. It is triggered by intestinal alkaline sphingomyelinase (Alk-SMase) that is present in the intestinal mucosa and content. The mechanism by which the enzyme is released into the lumen is not clear. We studied whether trypsin can dissociate alk-SMase from the mucosa and affect its activity. During luminal perfusion of rat intestine addition of trypsin to the buffer increased alk-SMase activity in the perfusate output by about 3-fold. Treating COS-7 cells transfected with alk-SMase cDNA with trypsin increased the SMase activity in the medium and reduced that in the cell lysate dose-dependently. The appearance of alk-SMase in the perfusate and culture medium was confirmed by Western blotting. The effect of trypsin was blocked by trypsin inhibitor and neither chymotrypsin nor elastase had similar effect. We also expressed the full length and C-terminal truncated alk-SMase in COS- 7 cells and found that the activity of the full length enzyme is mainly in the cells whereas that of the truncated form is mainly in the medium. Both forms were active but only the activity of the full length alk-SMase was enhanced by trypsin. By linking a poly-His tag to the constructed cDNA, we found that the first tryptic site Arg440 upstream of the signal anchor was attacked by trypsin. In conclusion trypsin cleaves the alk-SMase at the C-terminal, releases it from mucosa and meanwhile enhances its activity. The findings indicate a physiological role of trypsin in sphingomyelin digestion.