We have shown that deficiency of neutral sphingomyelinase 2 (nSMase2), an enzyme generating the sphingolipid ceramide, improves memory in adult mice. Here, we performed sphingolipid and RNA-seq analyses on the cortex from 10 months-old nSMase2-deficient (fro/fro) and heterozygous (+/fro) mice. fro/fro cortex showed reduced levels of ceramide, particularly in astrocytes. Differentially abundant transcripts included several functionally related groups, with decreases in mitochondrial oxidative phosphorylation and astrocyte activation transcripts, while axon guidance and synaptic transmission transcripts were increased, indicating a role of nSMase2 in oxidative stress, astrocyte activation, and cognition. Experimentally induced oxidative stress decreased the level of glutathione (GSH), an endogenous inhibitor of nSMase2, and increased immunolabeling for ceramide in primary +/fro astrocytes, but not in fro/fro astrocytes. β-galactosidase activity was lower in 5-weeks old fro/fro astrocytes, indicating delayed senescence due to nSMase2 deficiency. In fro/fro cortex, levels of the senescence markers C3b and p27, and the proinflammatory cytokines interleukin 1β, interleukin 6, and tumor necrosis factor α were reduced, concurrent with 2-fold decreased phosphorylation of their downstream target, protein kinase Stat3. RNA and protein levels of the ionotropic glutamate receptor subunit 2b (Grin2b or NR2B) were increased by 2-fold, an effect known to enhance cognition. This was consistent with 3.5-fold reduced levels of exosomes carrying miR-223-3p, a micro-RNA downregulating Grin2b. In summary, our data show that nSMase2 deficiency prevents oxidative stress-induced elevation of ceramide and secretion of exosomes by astrocytes that suppress neuronal function, indicating a role of nSMase2 in the regulation of neuroinflammation and cognition during brain aging.