The plasma membrane (PM) is a major resource for production of bioactive lipids and contains a large proportion of the cellular sphingomyelin (SM) content. Consequently, the regulation of SM levels at the PM by enzymes such as sphingomyelinase (SMase) and SM synthase 2 (SMS2) can have profound effects – both on biophysical properties of the membrane, but also on cellular signaling. Over the past 20 years, there has been considerable research into the physiological and cellular functions associated with regulation of SM levels, notably with regards to the production of ceramide. In this review, we will summarize this research with particular focus on the SMases and SMS2. We will outline what biological functions are associated with SM metabolism/production at the PM, and discuss what we believe are major challenges that need to be addressed in future studies.