FTY720 (fingolimod; 2-amino-2[2-(4-octylphenyl)ethyl]-1,3-propanediol, Novartis) is the prototype of a new generation of immunomodulators. The drug is the result of extensive chemical derivatisation based on the natural product myriocin, isolated from the ascomycete Isaria sinclairii. FTY720 bears structural similarity to sphingosine, a naturally occurring sphingolipid. As with sphingosine, FTY720 is effectively phosphorylated by sphingosine kinases in vivo and the phosphorylated drug targets G-protein-coupled receptors for sphingosine-1-phosphate (S1P). Gene deletion and reverse pharmacology studies have shown that FTY720 acts at S1P1 receptors on lymphocytes and the endothelium, thereby inhibiting the egress of T- and B cells from secondary lymphoid organs into the blood and their recirculation to inflamed tissues. Animal studies suggest that this novel mechanism translates into effective treatments for several autoimmune diseases and a recently completed Phase II clinical trial highlighted FTY720 as a potential therapy for relapsing-remitting multiple sclerosis.