In recent years sphingolipids have emerged as important signaling molecules regulating fundamental cell responses such as cell death and differentiation, proliferation and aspects of inflammation. Especially ceramide has been a main focus of research since it possesses pro-apoptotic capacity in many cell types. A counterplayer of ceramide was found in sphingosine-1-phosphate (S1P), which is generated from ceramide by the consecutive actions of ceramidase and sphingosine kinase. S1P can potently induce cell proliferation via binding to and activation of the Edg family of receptors which have now been renamed as S1P receptors. Obviously, a delicate balance between ceramide and sphingosine-1-phosphate determines whether cells undergo apoptosis or proliferate, two cell responses that are critically involved in tumor development. Directing the balance in favor of ceramide, i.e. by inhibiting ceramidase or sphingosine kinase activities may support the pro-apoptotic action of ceramide and thus may have beneficial effects in cancer therapy. This review will summarize novel insights into the regulation of sphingolipid formation and their potential involvement in tumor development. Finally, we will pinpoint potential new targets for tumor therapy.