Binding of nerve growth factor (NGF) to the trkA tyrosine kinase receptor results in receptor homodimer formation, transphosphorylation, and kinase activation that supports neuronal differentiation and survival. We have shown previously that short-term exposure of PC12 cells to brain-derived neurotrophic factor or to C2-ceramide activates a signaling pathway that results in serine phosphorylation of the trkA intracellular domain and reduces the ability of trkA to respond to NGF. Here we demonstrate that extended C2-ceramide exposure dramatically increases NGF-induced trkA activation and further show that C2-ceramide augments trkA tyrosine phosphorylation even in the absence of neurotrophin. This increase in trkA receptor phosphotyrosine is reflected in increased activation of both Erk1 and Erk2 and of the catalytic subunit of phosphatidylinositol 3-kinase. The C2-ceramide-mediated increase in tyrosine phosphorylation is blocked completely by the trk kinase inhibitor K252A, indicating that this increase results from an effect of C2-ceramide on trkA kinase activity. Consistent with this, crosslinking studies show that C2-ceramide promotes the formation of active trkA receptor homodimers. Together, these data suggest that chronic C2-ceramide treatment increases trkA activation by altering properties of the plasma membrane, which favors the formation of trkA homodimers.