Imbalanced lipid metabolism and increase in the ceramide-to-S1P ratio in the brain have been postulated to play a role in amyloidogenesis, neuroinflammatory reactions, and neuronal apoptosis in Alzheimer's disease (AD) pathology. FTY720, the immunomodulatory sphingosine 1-phosphate (S1P) analog, has recently gained interest because of its CNS-directed effects. In addition to its immunomodulatory functions in multiple sclerosis, FTY720 possesses anti-inflammatory and neuroprotective roles in different cerebral ischemia models. In the present study, we examined the effects of FTY720 in a rat model of AD. Memory deficit was induced by bilateral intrahippocampus injection of beta-amyloid peptide (Aβ(42)) and examined through the Morris water maze test. The extent of histological injury in the hippocampus and the activation of caspase-3 were determined respectively by Nissl staining and Western blotting. Chronic daily administration of FTY720 (1 mg/kg, i.p., 14 days) significantly attenuated the Aβ(42)-induced learning and memory impairment and prevented the hippocampus neuronal damage as well as caspase-3 activation. These data show for the first time that FTY720 has a beneficial effect in restoring memory loss in Aβ(42)-induced neurotoxicity and also suggest that S1P receptors and signaling pathways may provide a potential target for the treatment of AD.