Sphingosine kinase (SphK) is a highly conserved lipid kinase that phosphorylates sphingosine to form sphingosine-1-phosphate (S1P). S1P/SphK has been implicated as a signalling pathway to regulate diverse cellular functions [1-3], including cell growth, proliferation and survival [4-8]. We report that cells overexpressing SphK have increased enzymatic activity and acquire the transformed phenotype, as determined by focus formation, colony growth in soft agar and the ability to form tumours in NOD/SCID mice. This is the first demonstration that a wild-type lipid kinase gene acts as an oncogene. Using a chemical inhibitor of SphK, or an SphK mutant that inhibits enzyme activation, we found that SphK activity is involved in oncogenic H-Ras-mediated transformation, suggesting a novel signalling pathway for Ras activation. The findings not only point to a new signalling pathway in transformation but also to the potential of SphK inhibitors in cancer therapy.