Sphingomyelin (SM), glycosphingolipids, and gangliosides are important polar lipids in the milk fat globule membrane but are not found in standard milk replacement formulas. Because digestion and absorption of SM and glycosphingolipids generate the bioactive metabolites ceramide, sphingosine, and sphingosine-1-phosphate (S1P), and because intact gangliosides may have beneficial effects in the gut, this may be important for gut integrity and immune maturation in the neonate. The brush border enzymes that hydrolyze milk SM, alkaline sphingomyelinase (nucleotide phosphodiesterase pyrophosphatase 7), and neutral ceramidase are expressed at birth in both term and preterm infants. Released sphingosine is absorbed, phosphorylated to S1P, and converted to palmitic acid via S1P-lyase in the gut mucosa. Hypothetically, S1P also may be released from absorptive cells and exert important paracrine actions favoring epithelial integrity and renewal, as well as immune function, including secretory IgA production and migration of T lymphocyte subpopulations. Gluco-, galacto-, and lactosylceramide are hydrolyzed to ceramide by lactase-phlorizin hydrolase, which also hydrolyzes lactose. Gangliosides may adhere to the brush border and is internalized, modified, and possibly transported into blood, and may exert protective functions by their interactions with bacteria, bacterial toxins, and the brush border.