Expression of sphingosine kinase-1 (SphK-1) correlates with a poor survival rate of tumor patients. This effect is probably due to the ability of SphK-1 to be released into the extracellular medium where it catalyzes the biosynthesis of sphingosine-1-phosphate (S1P), a signaling molecule endowed with profound proangiogenic effects. SphK-1 is a leaderless protein which is secreted by an unconventional mechanism. In this paper, we will show that in human hepatocarcinoma Sk-Hep1 cells, extracellular signaling is followed by targeting the enzyme to the cell surface and parallels targeting of FGF-2 to the budding vesicles. We will also show that SphK-1 is present in a catalitycally active form in vesicles shed by SK-Hep1 and human breast carcinoma 8701-BC cells. The enzyme substrate sphingosine is present in shed vesicles where it is produced by neutral ceramidase. Shed vesicles are therefore a site for S1P production in the extracellular medium and conceivably also within host cell following vesicle endocytosis.