Sphingosine-1-phosphate (SPP), a polar sphingolipid metabolite, has received much attention recently as an extracellular mediator and an intracellular second messenger. It regulates a wide range of biological responses such as cell growth, death, differentiation, and migration. Recent identification of plasma membrane receptors and the cloning of SPP metabolizing enzymes have increased our understanding of the biology of SPP synthesis and action. However, controversy exists regarding the mode of action of this molecule. EDG-1 and related G-protein-coupled receptors were identified recently as plasma membrane receptors for SPP. In light of this recent discovery, many of the functions of SPP previously thought to be due to intracellular second messenger action should be reevaluated. In addition, signaling properties and functions of the three known receptors for SPP need to be fully delineated. The structures and the evolutionary conservation of SPP metabolizing enzymes from yeast to mammals support the hypothesis that SPP also plays a role as an intracellular second messenger. However, definitive assignment of the intracellular role of SPP awaits purification/molecular cloning of elusive intracellular receptors. Better knowledge of the molecular basis of SPP action is needed to assess the physiological and pathophysiological significance of this bioactive lipid mediator.