The potent immunosuppressive drug FTY720, a sphingosine analog, induces redistribution of lymphocytes from circulation to secondary lymphoid tissues. FTY720 is phosphorylated in vivo and functions as an agonist for four G-protein-coupled sphingosine-1-phosphate receptors. The identity of the kinase that phosphorylates FTY720 is still not known. Here we report that although both sphingosine kinase type 1 (SphK1) and type 2 (SphK2) can phosphorylate FTY720 with low efficiency, SphK2 is much more effective than SphK1. FTY720 inhibited phosphorylation of sphingosine catalyzed by SphK2 to a greater extent than it inhibits SphK1. Thus, SphK2 may be the relevant enzyme that is responsible for in vivo phosphorylation of FTY720.