A series of short-chain analogues of N-palmitoylsphingosine-1-phosphate, modified by replacement of the phosphate and the long alkenyl side chain with hydrolytically stable difluoromethylene phosphonate and phenyl, respectively, were prepared to study the structure-activity relationship for inhibition of sphingomyelinase. The study revealed that inhibition is highly dependent upon the stereochemistry of the asymmetric centers of the acylamino moiety, and resulted in identification of a non-competitive inhibitor with the same level of inhibitory activity of schyphostatin, the most potent of the few known small molecular inhibitors of sphingomyelinase.