Chronic kidney disease (CKD), characterized by sustained inflammation and progressive fibrosis, is highly prevalent and can eventually progress to end-stage kidney disease. However, current treatments to slow CKD progression are limited. Sphingosine 1-phosphate (S1P), a product of sphingolipid catabolism, is a pleiotropic mediator involved in many cellular functions, and drugs targeting S1P signaling have previously been studied particularly for autoimmune diseases. The primary mechanism of most of these drugs is functional antagonism of S1P receptor-1 (S1P1) expressed on lymphocytes and the resultant immunosuppressive effect. Here, we documented the role of local S1P signaling in perivascular cells in the progression of kidney fibrosis using primary kidney perivascular cells and several conditional mouse models. S1P was predominantly produced by sphingosine kinase 2 in kidney perivascular cells and exported via spinster homolog 2 (Spns2). It bound to S1P1 expressed in perivascular cells to enhance production of proinflammatory cytokines/chemokines upon injury, leading to immune cell infiltration and subsequent fibrosis. A small-molecule Spns2 inhibitor blocked S1P transport, resulting in suppression of inflammatory signaling in human and mouse kidney perivascular cells in vitro and amelioration of kidney fibrosis in mice. Our study provides insight into the regulation of inflammation and fibrosis by S1P and demonstrates the potential of Spns2 inhibition as a treatment for CKD and potentially other inflammatory and fibrotic diseases that avoids the adverse events associated with systemic modulation of S1P receptors.