Most lysosomal storage diseases result in neurodegeneration, but deficiencies in the same enzymes can also lead to syndromes without neurologic manifestations. The hypothesis that low levels of residual, intra-lysosomal enzymatic activities in the central nervous system (CNS) are protective has been difficult to prove because of inconsistencies in assays of tissue samples. Experimental correction of lysosomal enzyme deficiencies in animal models suggests that low-level enzymatic activity may reduce CNS pathology, but these results are difficult to interpret owing to the partial and transient nature of the improvements, the presence of secretory hydrolases, and other confounding factors. Using a novel transgenic/knockout strategy to manipulate the intracellular targeting of a hydrolase, we created a mouse that stably expresses low levels of lysosomal sphingomyelinase (L-SMase) in the complete absence of secretory sphingomyelinase (S-SMase). The brains of these mice exhibited 11.5–18.2% of wild-type L-SMase activity, but the cerebellar Purkinje cell layer, which is lost by 4 months of age in mice completely lacking L- and S-SMase, was preserved for at least 8 months. The L-SMase activities in other organs were 1–14% of wild-type levels, and by 8 months of age all peripheral organs had accumulated sphingomyelin and demonstrated pathological intracellular inclusions. Most importantly, L-SMase-expressing mice showed no signs of the severe neurologic disease observed in completely deficient mice, and their life span and general health were essentially normal. These findings show that stable, continuous, low-level expression of intra-lysosomal enzyme activity in the brain can preserve CNS function in the absence of secretory enzyme or other confounding factors.