Sphingosine-1-phosphate (S1P) is a highly bioactive lipid that exerts numerous biological effects both intracellularly as a second messenger and extracellularly by binding to its G-protein-coupled receptors of the endothelial differentiation gene family (S1P receptors-(1-5)). Intracellularly, at least two enzymes, sphingosine kinase and S1P phosphatase, regulate the activity of S1P by governing the phosphorylation status of S1P. To study the regulation of S1P levels, we cloned the human isoform of S1P phosphatase 1 (hSPPase1). The hSPPase1 has 78% homology to the mouse SPPase at the amino acid level with 6-8 possible transmembrane domains. Confocal microscopy revealed green fluorescent protein-tagged hSPPase1, expressed in either MCF7 or HEK293 cells, co-localized to endoplasmic reticulum with calreticulin. According to Northern blot analysis, hSPPase1 is expressed in most tissues, with the strongest levels found in the highly vascular tissues of placenta and kidney. Transient overexpression of hSPPase1 exhibited a 2-fold increase in phosphatase activity against S1P and dihydro-S1P, indicating that the expressed protein was functional. Small interfering RNA (siRNA) knockdown of endogenous hSPPase1 drastically reduced hSPPase1 mRNA levels, as confirmed by reverse transcription PCR, and resulted in an overall 25% reduction of in vitro phosphatase activity in the membrane fractions. Sphingolipid mass measurements in hSPPase1 siRNA knockdown cells revealed a 2-fold increase of S1P levels and concomitant decrease in sphingosine. In vivo labeling of hSPPase1 siRNA-treated cells showed accumulation of S1P within cells, as well as significantly increased secretion of S1P into the media, indicating that hSPPase1 regulates secreted S1P. In addition, siRNA-induced knockdown of hSPPase1 endowed resistance to tumor necrosis factor-alpha and the chemotherapeutic agent daunorubicin. Collectively, these data suggest that regulation of hSPPase1 with the resultant changes in cellular and secreted S1P could have important implications to cell proliferation, angiogenesis, and apoptosis.