The type 1 sphingosine 1-phosphate (S1P) G protein-coupled receptor (S1P1) transduces signals from S1P that mediate thymocyte emigration, T cell transmigration of lymph nodes, and T cell chemotaxis in tissues. Alterations in expression of functional S1P1 receptors by lymphocytes are the major mechanisms controlling their responses to S1P and were thought to be solely a consequence of the balance between surface down-regulation and insertion. However, results now show that lack of sulfation of tyrosines 19 and 22 of the extracellular N terminus of S1P1 diminishes high-affinity S1P binding and decreases S1P signaling of T cell migration and other functions. Non-sulfatable mutant (Y19,22F)S1P1 endows T cells with lower-affinity binding of [32P]S1P than wild-type S1P1 and transduces lesser effects of S1P on chemotaxis, chemokine-elicited chemotaxis, and T cell receptor-mediated proliferation and cytokine generation. Inhibition of S1P1 tyrosine sulfation or sulfatase removal of S1P1 sulfate in mouse CD4 T cells suppresses immune functional effects of S1P. Tyrosine sulfation of S1P1 may be a major controller of S1P effects on T cell traffic.