Sphingosine and sphingosine-1-phosphate (SPP) are interconvertible sphingolipid metabolites with opposing effects on cell growth and apoptosis. Based on sequence homology with LBP1, a lipid phosphohydrolase that regulates the levels of phosphorylated sphingoid bases in yeast, we report here the cloning, identification, and characterization of a mammalian SPP phosphatase (mSPP1). This hydrophobic enzyme, which contains the type 2 lipid phosphohydrolase conserved sequence motif, shows substrate specificity for SPP. Partially purified Myc-tagged mSPP1 was also highly active at dephosphorylating SPP. When expressed in yeast, mSPP1 can partially substitute for the function of LBP1. Membrane fractions from human embryonic kidney HEK293 cells transfected with mSPP1 markedly degraded SPP but not lysophosphatidic acid, phosphatidic acid, or ceramide-1-phosphate. Enforced expression of mSPP1 in NIH 3T3 fibroblasts not only decreased SPP and enhanced ceramide levels, it also markedly diminished survival and induced the characteristic traits of apoptosis. Collectively, our results suggest that SPP phosphohydrolase may regulate the dynamic balance between sphingolipid metabolite levels in mammalian cells and consequently influence cell fate.S phingosine-1-phosphate (SPP) is a bioactive sphingolipid metabolite that regulates diverse biological processes (reviewed in refs. 1 and 2). Many of its pleiotropic actions appear to be mediated by a family of specific cell surface G proteincoupled receptors (GPCR), known as EDG (endothelial differentiation genes) receptors. Binding of SPP to EDG-1 expressed on endothelial cells enhances survival (3), chemotaxis, and in vitro angiogenesis (4), and adherens junction assembly leading to morphogenetic differentiation (5), whereas binding of SPP to EDG-5 and EDG-3 induces neurite retraction and soma rounding (6, 7). SPP induces activation of G i -gated inward rectifying K ϩ -channels in atrial myocytes (8) and inhibits motility of melanoma cells (9) through as yet uncharacterized GPCRs.SPP also plays important roles inside cells. In response to diverse external stimuli, sphingosine kinase, the enzyme that catalyzes the phosphorylation of sphingosine to SPP, is activated (10-15). Intracellular SPP, in turn, mobilizes calcium from internal stores independently of inositol triphosphate (15, 16), as well as eliciting diverse signaling pathways leading to proliferation (17, 18) and suppression of apoptosis (19)(20)(21)(22).Because of its dual function as a ligand and second messenger and its pivotal role in cell growth and survival, the synthesis and degradation of SPP should be tightly regulated in a spatialtemporal manner. Until recently, however, little was known of the enzymes involved in SPP metabolism. We have purified sphingosine kinase to apparent homogeneity from rat kidney (23) and subsequently cloned and characterized a mammalian sphingosine kinase (24), which belongs to a highly conserved gene family (24,25). Enforced expression of sphingosine kinase markedly enhanced proliferation a...