Fingolimod is the first oral disease-modifying therapy approved for relapsing forms of multiple sclerosis (MS). Following phosphorylation in vivo, the active agent, fingolimod phosphate (fingolimod-P), acts as a sphingosine 1-phosphate (S1P) receptor modulator, binding with high affinity to four of the five known S1P receptors (S1P1, S1P3, S1P4 and S1P5). The mechanism of action of fingolimod in MS has primarily been considered as immunomodulatory, whereby fingolimod-P modulates S1P1 on lymphocytes, selectively retaining autoreactive lymphocytes in lymph nodes to reduce damaging infiltration into the central nervous system (CNS). However, emerging evidence indicates that fingolimod has direct effects in the CNS in MS. For example, in the MS animal model of experimental autoimmune encephalomyelitis (EAE), fingolimod is highly efficacious in both a prophylactic and therapeutic setting, yet becomes ineffective in animals selectively deficient for S1P1 on astrocytes, despite maintained normal immunologic receptor expression and functions, and S1P-mediated immune activities. Here, we review S1P signalling effects relevant to MS in neural cell types expressing S1P receptors, including astrocytes, oligodendrocytes, neurons, microglia and dendritic cells. The direct effects of fingolimod on these CNS cells observed in preclinical studies are discussed in view of the functional consequences of reducing neurodegenerative processes and promoting myelin preservation and repair. The therapeutic implications of S1P modulation in the CNS are considered in terms of the clinical outcomes of MS, such as reducing MS-related brain atrophy, and other CNS disorders. Additionally, we briefly outline other existing and investigational MS therapies that may also have effects in the CNS.