The function of SMPD3 (sphingomyelin phosphodiesterase 3, Ensembl gene identifier ENSG00000103056) is as follows. Catalyzes the hydrolysis of sphingomyelin to form ceramide and phosphocholine. Ceramide mediates numerous cellular functions, such as apoptosis and growth arrest, and is capable of regulating these 2 cellular events independently. Also hydrolyzes sphingosylphosphocholine. Regulates the cell cycle by acting as a growth suppressor in confluent cells. Probably acts as a regulator of postnatal development and participates in bone and dentin mineralization (PubMed:10823942, PubMed:14741383, PubMed:15051724). Binds to anionic phospholipids (APLs) such as phosphatidylserine (PS) and phosphatidic acid (PA) that modulate enzymatic activity and subcellular location. May be involved in IL-1-beta-induced JNK activation in hepatocytes (By similarity). May act as a mediator in transcriptional regulation of NOS2/iNOS via the NF-kappa-B activation under inflammatory conditions (By similarity). {ECO:0000250|UniProtKB:O35049, ECO:0000250|UniProtKB:Q9JJY3, ECO:0000269|PubMed:10823942, ECO:0000269|PubMed:14741383, ECO:0000269|PubMed:15051724}.