FTY720 (fingolimod) is a structural analogue of sphingosine, an endogenous lysophospholipid, which targets sphingosine-1-phosphate receptors after biotransformation to FTY720-phosphate. The immunomodulatory properties of this agent are mainly related to its ability to entrap lymphocytes in secondary lymphoid organs, reducing their availability for cell-mediated immune responses. Emerging evidence suggests that FTY720 also exerts direct actions on glial and precursor cells of the CNS which may be relevant for the process of tissue repair after injury. The therapeutic effects of the drug observed in animal models of human multiple sclerosis have provided the experimental basis for its clinical application. A recent Phase II study has demonstrated that oral FTY720 is effective in reducing disease activity in relapsing multiple sclerosis with a favorable adverse-effect profile. These results are awaiting confirmation in the three ongoing Phase III clinical trials evaluating FTY720 for relapsing-remitting multiple sclerosis.