Neointimal lesion formation was induced in sphingosine 1-phosphate (S1P) receptor 2 (S1P2)-null and wild-type mice by ligation of the left carotid artery. After 28 days, large neointimal lesions developed in S1P2-null but not in wild-type arteries. This was accompanied with a significant increase in both medial and intimal smooth muscle cell (SMC) replication between days 4 to 28, with only minimal replication in wild-type arteries. S1P2-null SMCs showed a significant increase in migration when stimulated with S1P alone and together with platelet-derived growth factor, whereas both wild-type and null SMCs migrated equally well to platelet-derived growth factor. S1P increased Rho activation in wild-type but not in S1P2-null SMCs, and inhibition of Rho activity promoted S1P-induced SMC migration. Plasma S1P levels were similar and did not change after surgery. These results suggest that activation of S1P2 normally acts to suppress SMC growth in arteries and that S1P is a regulator of neointimal development.