Apoptosis is generally accompanied by a late phase of ceramide (Cer) production, the significance of which is unknown. This study describes a previously unrecognized link between Cer accumulation and phosphatidylserine (PS) exposure at the cell surface, a characteristic of the execution phase of apoptosis resulting from a loss of plasma membrane phospholipid asymmetry. Using a fluorescent sphingomyelin (SM) analogue, N-(N-[6-[(7-nitrobenz-2-oxa-1,3-diazol-4-yl)amino]caproyl]–sphingosylphosphorylcholine (C₆-NBD-SM), we show that Cer is derived from SM, initially located in the outer leaflet of the plasma membrane, which gains access to a cytosolic SMase by flipping to the inner leaflet in a process of lipid scrambling paralleling PS externalization. Lipid scrambling is both necessary and sufficient for SM conversion: Ca²⁺ ionophore induces both PS exposure and SM hydrolysis, whereas scrambling-deficient Raji cells do not show PS exposure or Cer formation. Cer is not required for mitochondrial or nuclear apoptotic features since these are still observed in Raji cells. SM hydrolysis facilitates cholesterol efflux to methyl-β-cyclodextrin, which is indicative of a loss of tight SM–cholesterol interaction in the plasma membrane. We provide evidence that these biophysical alterations in the lipid bilayer are essential for apoptotic membrane blebbing/vesiculation at the cell surface: Raji cells show aberrant apoptotic morphology, whereas replenishment of hydrolyzed SM by C₆- NBD-SM inhibits blebbing in Jurkat cells. Thus, SM hydrolysis, during the execution phase of apoptosis, results from a loss of phospholipid asymmetry and contributes to structural changes at the plasma membrane.