Sphingosine 1‐phosphate (S1P) is a bioactive lipid of the sphingolipid family and plays a pivotal role in the mammalian nervous system. Indeed, S1P is a therapeutic target for treating demyelinating diseases such as multiple sclerosis. Being part of an interconnected sphingolipid metabolic network, the amount of S1P available for signalling is equilibrated between its synthetic (sphingosine kinases 1 and 2) and degradative (sphingosine 1‐phosphate lyase) enzymes. Once produced, S1P exerts its biological roles via signalling to a family of five G protein‐coupled S1P receptors 1–5 (S1PR1–5). Despite significant progress, the precise roles that S1P metabolism and downstream signalling play in regulating myelin formation and repair remain largely opaque and somewhat controversial. Genetic or pharmacological studies adopting various model systems identify that stimulating S1P‐S1PR signalling protects myelin‐forming oligodendrocytes after central nervous system (CNS) injury and attenuates demyelination in vivo. However, evidence to support its role in remyelination of the mammalian CNS is limited, although blocking S1P synthesis sheds light on the role of endogenous S1P in promoting CNS remyelination. This review focuses on summarising the current understanding of S1P in CNS myelin formation and repair, discussing the complexity of S1P–S1PR interaction and the underlying mechanism by which S1P biosynthesis and signalling regulates oligodendrocyte myelination in the healthy and injured mammalian CNS, raising new questions for future investigation.image