Several studies have demonstrated that sphingosine kinase 1 (SphK1) translocates to the plasma membrane (PM) upon its activation and further suggested the plasma membrane lipid raft microdomain (PMLRM) as a target for SphK1 relocalization. To date, however, direct evidence of SphK1 localization to the PMLRM has been lacking. In this report, using multiple biochemical and subcellular fractionation techniques we demonstrate that endogenous SphK1 protein and its substrate, D-erythro-sphingosine, are present within the PMLRM. Additionally, we demonstrate that the PMA stimulation of SphK1 localized to the PMLRM results in production of sphingosine-1-phosphate as well as induction of cell growth under serum deprivation conditions. We further report that Ser225Ala and Thr54Cys mutations, reported to abrogate phosphatidylserine binding, block SphK1 targeting to the PMLRM and SphK1 induced cell growth. Together these findings provide direct evidence that the PMLRM is the major site of action for SphK1 to overcome serum-deprived cell growth inhibition.