Ceramide is synthesised in endoplasmic reticulum. First, the amino acid serine following activation by combination with pyridoxal phosphate combines with palmitoyl-CoA to form 3-keto sphingosine. This is converted to dihydrosphingosine in a reductive step utilising NADPH. Dihydro ceramide is formed by combination with acyl-CoA, followed by desaturation to form ceramide.