The vascular and immune systems of mammals are closely intertwined: the individual components of the immune system must move between various body compartments to perform their function effectively. Sphingosine 1-phosphate (S1P), a bioactive lipid mediator, exerts effects on the two organ systems and influences the interaction between them. In the resting state, the vascular S1P gradient contributes to control of lymphocyte recirculation through the blood, lymphoid tissue and lymphatic vasculature. The high level of S1P in blood helps maintain endothelial barrier integrity. During the inflammatory process, both the level of S1P in different immune compartments and S1P receptor expression on lymphocytes and endothelial cells are modified, resulting in functionally important changes in endothelial cell and lymphocyte behaviour. These include transient arrest of lymphocytes in secondary lymphoid tissue, crucial for generation of adaptive immunity, and subsequent promotion of lymphocyte recruitment to sites of inflammation. This review begins with an outline of the basic biochemistry of S1P. S1P receptor signalling is then discussed, followed by an exploration of the roles of S1P in the vascular and immune systems, with particular focus on the interface between them. The latter part concerns crosstalk between S1P and other signalling pathways, and concludes with a look at therapies targeting the S1P-S1P receptor axis.