Sphingosine-1-phosphate (S1P) is a bioactive sphingolipid metabolite implicated in the regulation of vital biological processes. Ample evidence indicates that S1P acts as both an intracellular messenger and an extracellular ligand for a specific G protein-coupled receptor family. Cellular levels of S1P are tightly regulated in a spatio-temporal manner through its synthesis catalysed by sphingosine kinase and degradation by a S1P lyase and specific S1P phosphohydrolases. Moreover, the dynamic balance between levels of S1P and another sphingolipid metabolite, ceramide, is an important factor that determines cell survival. Accumulating evidence suggests that the S1P/ceramide rheostat is ultimately regulated by the relative activities of enzymes controlling the turnover of these sphingolipid metabolites. This underscores the importance of understanding how these enzymes are regulated. In this review, we discuss the identification of S1P metabolizing enzymes, their enzymatic properties and their roles in the control of the sphingolipid rheostat and cellular functions regulated by S1P.