Sphingosine, a metabolite of membrane sphingolipids, regulates proliferation of quiescent Swiss 3T3 fibroblasts (Zhang, H., N. E. Buckley, K. Gibson. and S. Spiegel. 1990. J. Biol. Chem. 265:76-81). The present study provides new insights into the formation and function of a unique phospholipid, a metabolite of sphingosine, which was unequivocally identified as sphingosine-1-phosphate. The rapid increase in 32P-labeled sphingosine-1-phosphate levels induced by sphingosine was concentration dependent and correlated with its effect on DNA synthesis. Similar to the mitogenic effects of sphingosine, low concentrations of sphingosine-1-phosphate stimulated DNA synthesis and induced pronounced morphological alterations. Both sphingosine and sphingosine-1-phosphate stimulated DNA synthesis in cells made protein kinase C deficient by prolonged treatment with phorbol ester and sphingosine still elicited similar increases in sphingosine-1-phosphate levels in these cells. Although both sphingosine and sphingosine-1-phosphate acted synergistically with a wide variety of growth factors, there was no additive or synergistic effect in response to a combination of sphingosine and sphingosine-1-phosphate. Using a digital imaging system for measurement of calcium changes, we observed that both sphingosine and sphingosine-1-phosphate are potent calcium-mobilizing agonists in viable 3T3 fibroblasts. The rapid rise in cytosolic free calcium was independent of the presence of calcium in the external medium, indicating that the response is due to the mobilization of calcium from internal store. Our results suggest that sphingosine-1-phosphate may be a component of the intracellular second messenger system that is involved in calcium release and the regulation of cell growth induced by sphingosine.