Sphingosine-1-phosphate (S1P) is the ligand for a family of specific G protein-coupled receptors that regulate a wide variety of cellular functions, including cytoskeletal rearrangements and cell motility. Because of the pivotal role of S1P, its levels are low and tightly regulated in a spatial-temporal manner through its synthesis catalyzed by sphingosine kinases and degradation by an S1P lyase and specific S1P phosphatases (SPP). Surprisingly, down-regulation of SPP-1 enhanced migration toward epidermal growth factor (EGF); conversely, overexpression of SPP-1, which is localized in the endoplasmic reticulum, attenuated migration toward EGF. To determine whether the inhibitory effect on EGF-induced migration was because of decreased S1P or increased ceramide as a consequence of acylation of increased sphingosine by ceramide synthase, we used fumonisin B1, a specific inhibitor of ceramide synthase. Although fumonisin B1 blocked ceramide production and increased sphingosine, it did not reverse the negative effect of SPP-1 expression on EGF- or S1P-induced chemotaxis. EGF activated the epidermal growth factor receptor to the same extent in SPP-1-expressing cells, yet ERK1/2 activation was impaired. In agreement, PD98059, an inhibitor of the ERK-activating enzyme MEK, decreased EGF-stimulated migration. We next examined the possibility that intracellularly generated S1P might be involved in activating a G protein-coupled S1P receptor important for EGF-directed migration. Treatment with pertussis toxin to inactivate Galpha(i) suppressed EGF-induced migration. Moreover, expression of regulator of G protein signaling 3, which inhibits S1P receptor signaling and completely prevented ERK1/2 activation mediated by S1P receptors, not only reduced migration toward S1P but also markedly reduced migration toward EGF. Collectively, these results suggest that metabolism of S1P by SPP-1 is important for EGF-directed cell migration.