Sphingolipids (SFs) represent a large class of lipids playing diverse functions in a vast number of physiological and pathological processes. Sphingomyelin (SM) is the most abundant SF in the cell, with ubiquitous distribution within mammalian tissues, and particularly high levels in the Central Nervous System (CNS). SM is an essential element of plasma membrane (PM) and its levels are crucial for the cell function. SM content in a cell is strictly regulated by the enzymes of SM metabolic pathways, which activities create a balance between SM synthesis and degradation. The de novo synthesis via SM synthases (SMSs) in the last step of the multi-stage process is the most important pathway of SM formation in a cell. The SM hydrolysis by sphingomyelinases (SMases) increases the concentration of ceramide (Cer), a bioactive molecule, which is involved in cellular proliferation, growth and apoptosis. By controlling the levels of SM and Cer, SMSs and SMases maintain cellular homeostasis. Enzymes of SM cycle exhibit unique properties and diverse tissue distribution. Disturbances in their activities were observed in many CNS pathologies. This review characterizes the physiological roles of SM and enzymes controlling SM levels as well as their involvement in selected pathologies of the Central Nervous System, such as ischemia/hypoxia, Alzheimer disease (AD), Parkinson disease (PD), depression, schizophrenia and Niemann Pick disease (NPD).