Sphingosine-1-phosphate lyase (SPL) is a pyridoxal 5′-phosphate-dependent enzyme involved in the irreversible degradation of sphingosine-1-phosphate (S1P)—a bioactive sphingolipid that modulates a broad range of biological processes (cell proliferation, migration, differentiation and survival; mitochondrial functioning; and gene expression). Although SPL activity leads to a decrease in the available pool of S1P in the cell, at the same time, hexadecenal and phosphoethanolamine, compounds with potential biological activity, are generated. The increased expression and/or activity of SPL, and hence the imbalance between S1P and the end products of its cleavage, were demonstrated in several pathological states. On the other hand, loss-of-function mutations in the SPL encoding gene are a cause of severe developmental impairments. Recently, special attention has been paid to neurodegenerative diseases as the most common pathologies of the nervous system. This review summarizes the current findings concerning the role of SPL in the nervous system with an emphasis on neurodegeneration. Moreover, it briefly discusses pharmacological compounds directed to inhibit its activity.