The synthesis of sphingomyelin was studied in baby hamster kidney cells and in subcellular fractions derived from rat liver. During pulse-chase experiments with [3H]choline in tissue culture cells, the specific radioactivity of sphingomyelin continued to increase after the specific activities of phosphocholine and cytidine 5'-diphosphate choline (CDP-choline) had declined by a factor of 10. The addition of [3H]methionine to cells that were grown in 1 mM dimethylethanolamine efficiently radiolabeled phosphatidylcholine (by methylation of phosphatidyldimethylethanolamine) and sphingomyelin but not phosphocholine or CDP-choline. Thus, the proximal donor of the phosphocholine moiety of sphingomyelin was not CDP-choline but probably phosphatidylcholine. These in vivo results prompted investigation of the enzymic synthesis using phosphatidyl[3H]choline or [3H]ceramide as substrates. With both substrates the subcellular fraction with the highest specific enzyme activity was the plasma membrane. When phosphatidyl[3H]choline was used as the substrate, phospholipid exchange proteins were included in the reaction to effect the transfer of the labeled phospholipid from liposomes into the membrane bilayer in which the enzyme resided. Under these conditions the synthesis of sphingomyelin was almost completely dependent upon the addition of phospholipid exchange proteins. When [3H]ceramide was used as the substrate, the addition of detergents was necessary for sphingomyelin synthesis. The use of phospholipid exchange proteins to introduce lipid substrates to membrane-bound enzymes may have much broader applicability.