S1P is a pleotropic sphingolipid signalling molecule that acts through binding to five high‐affinity G‐protein coupled receptors. S1P‐signaling affects cell fate in a multitude of ways, e.g. influencing cell differentiation, proliferation, and apoptosis, as well as playing an important role in immune cell trafficking. Though many effects of S1P‐signaling in the human body have been discovered, the full range of functions is yet to be understood. For inflammatory skin diseases such as atopic dermatitis and psoriasis, evidence is emerging that dysfunction and imbalance of the S1P‐axis is a contributing factor. Multiple studies investigating the efficacy of S1PR modulators in alleviating the severity and symptoms of skin conditions in various animal models and human clinical trials have shown promising results and validated the interest in the S1P‐axis as a potential therapeutic target. Even though the involvement of S1P‐signalling in inflammatory skin diseases still requires further clarification, the implications of the recent findings may prompt expansion of research to additional skin conditions and more S1P‐axis modulatory pharmaceuticals.