Neutral sphingomyelinase 2 (nSMase2), encoded by the SMPD3 gene, is a pivotal enzyme in sphingolipid metabolism, hydrolyzing sphingomyelin to produce ceramide, a bioactive lipid involved in apoptosis, inflammation, membrane structure, and extracellular vesicle (EV) biogenesis. nSMase2 is abundantly expressed in the central nervous system (CNS), particularly in neurons, and its dysregulation is implicated in pathologies such as Alzheimer's disease (AD), Parkinson's disease (PD), amyotrophic lateral sclerosis (ALS), prion diseases, and neuroviral diseases. In this review, we discuss the critical role of nSMase2 in the CNS and its involvement in neurological as well as non-neurological diseases. We explore the enzyme's functions in sphingolipid metabolism, its regulatory mechanisms, and the implications of its dysregulation in disease pathogenesis. The chapter highlights the therapeutic potential of pharmacologically targeting nSMase2 with small molecule inhibitors and emphasizes the need for further research to optimize inhibitor specificity and efficacy for clinical applications. By understanding the multifaceted roles of nSMase2, we aim to provide insights into novel therapeutic strategies for treating complex diseases associated with its dysregulation.