Extensive vascular leakage and shock is a major cause of dengue‐associated mortality. At present, there are no specific treatments available. Sphingolipid pathway is a key player in the endothelial barrier integrity; and is mediated through the five sphingosine‐1‐phosphate receptors (S1PR1‐S1PR5). Signaling through S1PR2 promotes barrier disruption; and in Dengue virus (DENV)‐infection, there is overexpression of this receptor. Fingolimod (FTY720) is a specific agonist that targets the remaining barrier‐protective S1P receptors, without targeting S1PR2. In the present study, we explored whether FTY720 treatment can alleviate DENV‐induced endothelial hyperpermeability. In functional assays, in both in vitro systems and in AG129 animal models, FTY720 treatment was found effective. Upon treatment, there was complete restoration of the monolayer integrity in DENV serotype 2‐infected human microvascular endothelial cells (HMEC‐1). At the molecular level, the treatment reversed activation of the S1P pathway. It significantly reduced the phosphorylation of the key molecules such as PTEN, RhoA, and VE‐Cadherin; and also, the expression levels of S1PR2. In DENV2‐infected AG129 mice treated with FTY720, there was significant improvement in weight gain, in overall clinical symptoms, and in survival. Whereas 100% of the DENV2‐infected, untreated animals died by day‐10 post‐infection, 70% of the FTY720‐treated animals were alive; and at the end of the 15‐day post‐infection observation period, 30% of them were still surviving. There was a significant reduction in the Evan's‐blue dye permeability in the organs of FTY720‐treated, DENV‐2 infected animals; and also improvement in the hemogram, with complete restoration of thrombocytopenia and hepatic function. Our results show that the FDA‐approved molecule Fingolimod (FTY720) is a promising therapeutic intervention in severe dengue.