In this study, roles of Sp1/Sp3 transcription factors in the regulation of the activity of human telomerase reverse transcriptase (hTERT) promoter in response to ceramide were examined in the A549 human lung adenocarcinoma cells. The activity of the N-terminal truncated hTERT promoter, lacking the c-Myc-recognition (E-box) region, but containing multiple Sp1/Sp3 sites, was also significantly inhibited by C6-ceramide, indicating a role for ceramide in the regulation of Sp1/Sp3 function. Partial inhibition of Sp1 expression using small interfering RNA (siRNA) resulted in a significant inhibition of the hTERT promoter. Treatment with C6-ceramide inhibited the trans-activation function of over-expressed Sp1 whereas it induced the repressor effects of exogenous Sp3 on hTERT promoter. The interaction between Sp1 with hTERT promoter DNA was significantly reduced in response to ceramide as assessed by chromatin immunoprecipitation (ChIP) analysis. In contrast, the promoter DNA-binding activity of Sp3 was slightly increased in response to C6-ceramide, resulting in the increased ratio of Sp3/Sp1 on the hTERT promoter, which was concomitant with the reduced recruitment of RNA polymerase II to the promoter. Furthermore, mutations of various Sp1/Sp3-recognition sequences significantly attenuated the activity of the promoter in the presence or absence of ceramide, demonstrating the importance of multiple Sp1/Sp3 recognition sites for the promoter activity. Mechanistically, the data demonstrated that C6-ceramide reduced the acetylation of Sp3 protein, and partially blocked the activation of the hTERT promoter by the histone deacetylase (HDAC) inhibitor trichostatin A (TSA). The roles of endogenous long chain ceramide generated in response to gemcitabine (GMZ) in the inhibition of hTERT promoter activity, and the regulation of Sp3 acetylation were also demonstrated.