The deficient activity of the human lysosomal hydrolase, acid sphingomyelinase (ASM, EC 3.1.4.12), results in the neuronopathic (Type A) and non-neuronopathic (Type B) forms of Niemann-Pick disease (NPD). To investigate the genetic basis of the phenotypic heterogeneity in NPD, the molecular lesions in the ASM gene were determined from three unrelated NPD patients and evaluated by transient expression in COS-1 cells. A Type A NPD patient of Asian Indian ancestry (proband 1) was homoallelic for a T to A transversion in exon 2 of the ASM gene which predicted a premature stop at codon 261 of the ASM polypeptide (designated L261X). In contrast, an unrelated Type A patient of European ancestry (proband 2) was heteroallelic for a two-base (TT) deletion in exon 2 which caused a frame-shift mutation at ASM codon 178 (designated fsL178), leading to a premature stop at codon 190, and a G to A transition in exon 3 which caused a methionine to isoleucine substitution at codon 382 (designated M382I). Transient expression of the fsL178, L261X, and M382I mutations in COS-1 cells demonstrated that these lesions did not produce catalytically active ASM, consistent with the severe neuronopathic Type A NPD phenotype. In contrast, an unrelated Type B patient of European descent (proband 3) was heteroallelic for two missense mutations, a G to A transition in exon 2 which predicted a glycine to arginine substitution at ASM codon 242 (designated G242R), and an A to G transition in exon 3 which resulted in an asparagine to serine substitution at codon 383 (designated N383S). Interestingly, the G242R allele produced ASM activity in COS-1 cells at levels about 40% of that expressed by the normal allele, thereby explaining the mild Type B phenotype of proband 3 and the high residual activity (i.e. approximately 15% of normal) in cultured lymphoblasts. In contrast, the N383S allele did not produce catalytically active enzyme. None of these five ASM mutations was detected in over 60 other unrelated NPD patients analyzed, nor were these mutations found in over 100 normal ASM alleles. Thus, small deletions or nonsense mutations which trunctated the ASM polypeptide, or missense mutations that rendered the enzyme noncatalytic, resulted in Type A NPD disease, whereas a missense mutation that produced a defective enzyme with residual catalytic activity caused the milder nonneuronopathic Type B phenotype. These findings have facilitated genotype/phenotype correlations for this lysosomal storage disease and provided insights into the functional organization of the ASM polypeptide.