Sphingosine 1-phosphate (S1P) is stored in and released from platelets in response to cell activation. However, recent studies show that it is also released from a number of cell types, where it can function as a paracrine/autocrine signal to regulate cell proliferation, differentiation, survival, and motility. This review discusses the role of S1P in cellular regulation, both at the molecular level and in terms of health and disease. The main biochemical routes for S1P synthesis (sphingosine kinase) and degradation (S1P lyase and S1P phosphatase) are described. The major focus is on the ability of S1P to bind to a novel family of G-protein-coupled receptors (endothelial differentiation gene [EDG]-1, -3, -5, -6, and -8) to elicit signal transduction (via G(q)-, G(i)-, G(12)-, G(13)-, and Rho-dependent routes). Effector pathways regulated by S1P are divergent, such as extracellular signal-regulated kinase, p38 mitogen-activated protein kinase, phospholipases C and D, adenylyl cyclase, and focal adhesion kinase, and occur in multiple cell types, such as immune cells, neurones, smooth muscle, etc. This provides a molecular basis for the ability of S1P to act as a pleiotropic bioactive lipid with an important role in cellular regulation. We also give an account of the expanding role for S1P in health and disease; in particular, with regard to its role in atherosclerosis, angiogenesis, cancer, and inflammation. Finally, we describe future directions for S1P research and novel approaches whereby S1P signalling can be manipulated for therapeutic intervention in disease.