Sphingolipids play a very crucial role in many diseases and are well-known as signaling mediators in many pathways. Sphingolipids are produced during the de novo process in the ER (endoplasmic reticulum) from the nonsphingolipid precursor and comprise both structural and bioactive lipids. Ceramide is the central core of the sphingolipid pathway, and its production has been observed following various treatments that can induce several different cellular effects including growth arrest, DNA damage, apoptosis, differentiation, and senescence. Ceramides are generally produced through the sphingomyelin hydrolysis and catalyzed by the enzyme sphingomyelinase (SMase) in mammals. Presently, there are many known SMases and they are categorized into three groups acid SMases (aSMases), alkaline SMases (alk-SMASES), and neutral SMases (nSMases). The yeast homolog of mammalians neutral SMases is inositol phosphosphingolipid phospholipase C. Yeasts generally have inositol phosphosphingolipids instead of sphingomyelin, which may act as a homolog of mammalian sphingomyelin. In this review, we shall explain the structure and function of inositol phosphosphingolipid phospholipase C1, its localization inside the cells, mechanisms, and its roles in various cell responses during replication stresses and diseases. This review will also give a new basis for our understanding for the mechanisms and nature of the inositol phosphosphingolipid phospholipase C1/nSMase.