Sphingosine 1-phosphate (SPP), a lipid second messenger formed by the action of sphingosine kinase, has been implicated in regulating diverse biological processes, including growth, survival, and differentiation. N,N-Dimethylsphingosine (DMS) inhibits sphingosine kinase and has been used to investigate the biological roles of SPP; however, little is known of the mechanism of inhibition of sphingosine kinase by DMS. In addition, DMS has been shown to inhibit protein kinase C in vitro. Here we report that DMS is a competitive inhibitor of sphingosine kinase from U937 monoblastic leukemia cells, Swiss 3T3 fibroblasts, and PC12 pheochromocytoma cells. DMS decreases basal levels of SPP and prevents increases in SPP in response to physiological stimuli known to activate sphingosine kinase. DMS also effectively increases cellular levels of ceramide in a variety of cell types, and resetting of the ceramide/SPP rheostat may account for the pro-apoptotic effects of DMS. Moreover, DMS, at concentrations which effectively inhibit sphingosine kinase, has no effect on protein kinase C activity or its membrane translocation. Thus, DMS acts as a specific competitive inhibitor of sphingosine kinase in diverse cell types and is a useful tool to elucidate the role of SPP as an intracellular second messenger.