The distribution and cell-free transfer of ceramide and other lipids were compared using highly purified fractions of endoplasmic reticulum, transitional endoplasmic reticulum, transition vesicles and Golgi apparatus from rat liver. Ceramides were present in both endoplasmic reticulum and Golgi apparatus where they represented between 0.3 and 1% of the total lipids. Ceramides, however, were much reduced or absent (< 0.05%) from transition vesicles. Transition vesicles were induced to form from transitional endoplasmic reticulum by incubation with ATP and a cytosol fraction. When transfer of [C-14]choline-labeled phosphatidylcholine from transitional endoplasmic reticulum to Golgi apparatus was followed, transition vesicles were more efficient in transfer than the transitional endoplasmic reticulum from which they were derived. This transfer was temperature -and ATP-dependent and inhibited by N-ethylmaleimide. When transfer of [H-3]ceramide was followed, there was little or no transfer via transition vesicles and that transfer which occurred was temperature-, ATP- and N-ethylmaleimide independent. Transfer of ceramide in the cell-free system did occur from endoplasmic reticulum to Golgi apparatus but via a non-vesicular mechanism that was temperature-dependent but not dependent on ATP or cytosol, alone, or in combination, nor was it inhibited by N-ethylmaleimide. A component of phosphatidylcholine transfer exhibited similar characteristics. The results provide evidence for two distinct mechanisms for cell-free transfer of lipids from endoplasmic reticulum to Golgi apparatus. The first is via 50 to 70 nm transition vesicles which is temperature- and ATP-dependent, inhibited by N-ethylmaleimide and from which ceramides are excluded. The second is non-vesicular, temperature-dependent, and neither ATP- nor cytosol-dependent. It accounts for the bulk of the ceramide transfer. As a result during cell-free lipid transfer from endoplasmic reticulum to Golgi apparatus, lipid sorting occurs such that ceramides are largely absent from the transition vesicles and, apparently are delivered to the Golgi apparatus by another mechanism.