The lipid mediator sphingosine-1-phosphate (S1P), the product of sphingosine kinase (SPHK)-induced phosphorylation of sphingosine, is known to stabilize interendothelial junctions and prevent microvessel leakiness. Here, we investigated the role of SPHK1 activation in regulating the increase in pulmonary microvessel permeability induced by challenge of mice with lipopolysaccharide or thrombin ligation of protease-activating receptor (PAR)-1. Both lipopolysaccharide and thrombin increased mouse lung microvascular permeability and resulted in a delayed activation SPHK1 that was coupled to the onset of restoration of permeability. In contrast to wild-type mice, Sphk1^-/- mice showed markedly enhanced pulmonary edema formation in response to lipopolysaccharide and PAR-1 activation. Using endothelial cells challenged with thrombin concentration (50 nmol/L) that elicited a transient but reversible increase in endothelial permeability, we observed that increased SPHK1 activity and decreased intracellular S1P concentration preceded the onset of barrier recovery. Thus, we tested the hypothesis that released S1P in a paracrine manner activates its receptor S1P1 to restore the endothelial barrier. Knockdown of SPHK1 decreased basal S1P production and Rac1 activity but increased basal endothelial permeability. In SPHK1-depleted cells, PAR-1 activation failed to induce Rac1 activation but augmented RhoA activation and endothelial hyperpermeability response. Knockdown of S1P1 receptor in endothelial cells also enhanced the increase in endothelial permeability following PAR-1 activation. S1P treatment of Sphk1^-/- lungs or SPHK1-deficient endothelial cells restored endothelial barrier function. Our results suggest the crucial role of activation of the SPHK1S1PS1P1 signaling pathway in response to inflammatory mediators in endothelial cells in regulating endothelial barrier homeostasis.