FTY720, a sphingosine analog, is in clinical trials as an immunomodulator. The biological effects of FTY720 are believed to occur after its metabolism to FTY720 phosphate. However, very little is known about whether FTY720 can interact with and modulate the activity of other enzymes of sphingolipid metabolism. We examined the ability of FTY720 to modulate de novo ceramide synthesis. In mammals, ceramide is synthesized by a family of six ceramide synthases, each of which utilizes a restricted subset of acyl-CoAs. We show that FTY720 inhibits ceramide synthase activity in vitro by noncompetitive inhibition toward acyl-CoA and uncompetitive inhibition toward sphinganine; surprisingly, the efficacy of inhibition depends on the acyl-CoA chain length. In cultured cells, FTY720 has a more complex effect, with ceramide synthesis inhibited at high (500 nM to 5 microM) but not low (<200 nM) sphinganine concentrations, consistent with FTY720 acting as an uncompetitive inhibitor toward sphinganine. Finally, electrospray ionization-tandem mass spectrometry demonstrated, unexpectedly, elevated levels of ceramide, sphingomyelin, and hexosylceramides after incubation with FTY720. Our data suggest a novel mechanism by which FTY720 might mediate some of its biological effects, which may be of mechanistic significance for understanding its mode of action.