Spingolipids (SLs) are an important component of central nervous system (CNS) myelin sheaths and affect the viability of brain cells (oligodendrocytes, neurons and astrocytes) that is determined by signaling mediated by bioactive sphingoids (lyso-SLs). Recent studies indicate that two lipids, ceramide and sphingosine 1-phosphate (S1P), are particularly involved in many human diseases including the autoimmune inflammatory demyelination of multiple sclerosis (MS). In this review we: (1) Discuss possible sources of ceramide in CNS; (2) Summarize the features of the metabolism of S1P and its downstream signaling through G-protein-coupled receptors; (3) Link perturbations in bioactive SLs metabolism to MS neurodegeneration and (4) Compile ceramide and S1P relationships to this process. In addition, we described recent preclinical and clinical trials of therapies targeting S1P signaling, including 2-amino-2-propane-1,3-diol hydrochloride (FTY720, fingolimod) as well as proposed intervention to specify critical SL levels that tilt balances of apoptotic/active ceramide versus anti-apoptotic/inactive dihydroceramide that may offer a novel and important therapeutic approach to MS.