The sphingomyelin pathway, initiated by hydrolysis of sphingomyelin to ceramide and stimulation of a Ser/Thr ceramide-activated protein (CAP) kinase, mediates tumour necrosis factor-alpha (TNF-alpha) and interleukin-1 beta action. CAP kinase is membrane-bound and proline-directed, recognizing the minimal substrate motif Thr-Leu-Pro. TNF may use the sphingomyelin pathway to signal Raf1 to activate the MAP kinase cascade. Evidence shows that cytoplasmic Raf1 binds to GTP-ras upon cellular stimulation, is recruited to the plasma membrane, and activated. How membrane-bound Raf1 is activated is uncertain, but regulation of its kinase activity may involve its phosphorylation. Specific Raf kinases, however, have not hitherto been identified. Here we report that CAP kinase phosphorylates Raf1 on Thr 269, increasing its activity towards MEK (MAP kinase or ERK kinase). Moreover, in intact HL-60 cells, CAP kinase complexes with Raf1 and, in response to TNF and ceramide analogues, phosphorylates and activates Raf1, implicating CAP kinase as a link between the TNF receptor and Raf1.