Sphingosine 1-phosphate (S1P) is the natural ligand for a specific family of G protein-coupled receptors (-Rs). The type 1 S1P-R (S1P(1)) is important for lymphocyte egress, and blood-borne S1P as the natural ligand for S1P(1) is involved in the maintenance of lymphocyte circulation. This report reveals that extracellular S1P was cleared by all tested primary cells and cell lines with exponential progression. Clearance of S1P, but not sphingosine (Sph) was inhibited with the protein phosphatase inhibitor sodium orthovanadate. Fluorescence microscopy and flow cytometry using fluorescently labeled S1P and Sph showed a major cellular uptake of Sph, but not S1P. HPLC-analyses with C17-Sph demonstrated that cellular Sph accumulation was transient in tested cell lines, but enduring in mouse splenocytes. Sub cellular fractionation resulted in dephosphorylation of S1P to Sph by nuclear, membrane, and cytosolic fractions. Degradation of Sph however only occurred in combined membrane and cytosolic fractions. Inhibitors for Sph kinases 1/2, ceramide synthase, and S1P-lyase, as well as S1P-lyase deficiency did not block clearance of extracellular S1P. In vivo experiments revealed a transient increase in plasma S1P levels after single intravenous injection into C57BL/6 mice. This exogenously added S1P was cleared within 15-30 min in contrast to ex vivo incubation of whole blood which required more than 8 h for comparable clearance from plasma. Our data thus show that extracellular S1P is dephosphorylated and subsequently converted by cells, which appears to be important for clearance of the signaling molecule S1P in the local tissue environment after infections or injuries.