Numerous extracellular stimuli activate SK1 (sphingosine kinase type 1) to catalyse the production of sphingosine 1-phosphate, a bioactive lipid that functions as both an extracellular ligand for a family of G-protein-linked receptors and as a putative intracellular messenger. Phorbol esters, calcium or immunoglobulin receptors stimulate SK1 by promoting its translocation to the plasma membrane, which brings it into proximity both to its substrate (i.e. sphingosine) and to activating acidic phospholipids (e.g. phosphatidylserine). To evaluate the consequence of SK translocation, we generated an SK1-derivative tagged with a myristoylation sequence (Myr-SK1) on its N-terminus and overexpressed the construct in 3T3-L1 fibroblasts using recombinant retrovirus. Myr-SK1 overexpression increased SK activity by more than 50-fold in crude membranes, while only stimulating cytoplasmic SK activity by 4-fold. In contrast, the overexpression of WT-SK1 (wild-type SK1), as well as that of a construct containing a false myristoylation sequence (A2-Myr-SK1), markedly increased SK activity in both membrane and cytoplasmic compartments. Immunofluorescence confirmed that Myr-SK1 preferentially localized at the plasma membrane, whereas WT-SK1 and A2-Myr-SK1 partitioned in cytoplasmic/perinuclear cellular regions. Surprisingly, Myr-SK1 overexpression significantly decreased the rates of cell proliferation by delaying exit from G0/G1 phase. Moreover, expression of Myr-SK1 but not WT-SK1 or A2-Myr-SK1 protected cells from apoptosis induced by serum withdrawal. Collectively, these findings reveal that altering the subcellular location of SK1 has marked effects on cell function, with plasma membrane-associated SK having a potent inhibitory effect on the G1-S phase transition.