This review will focus on the role of sphingosine and its phosphorylated derivative sphingosine-1-phosphate (SPP) in cell growth regulation and signal transduction. We will show that many of the effects attributed to sphingosine in quiescent Swiss 3T3 fibroblasts are mediated via its conversion to SPP. We propose that SPP has appropriate properties to function as an intracellular second messenger based on the following: it elicits diverse cellular responses; it is rapidly produced from sphingosine by a specific kinase and rapidly degraded by a specific lyase; its concentration is low in quiescent cells but increases rapidly and transiently in response to the growth factors, fetal calf serum (FCS) and platelet derived growth factor (PDGF); it releases Ca2+ from internal sources in an InsP3-independent manner; and finally, it may link sphingolipid signaling pathways to cellular ras-mediated signaling pathways by elevating phosphatidic acid levels. The effects of this novel second messenger on growth, differentiation and invasion of human breast cancer cells will be discussed.