The sphingolipid metabolite sphingosine 1-phosphate (S1P) is a well-known lipid mediator. As a lipid mediator, S1P must be present in extracellular space and bind to its cell surface receptors (S1P1-5). However, most S1P, synthesized intracellularly, is metabolized without being released into extracellular space, in other words, without functioning as a lipid mediator in the vast majority of cells except those supplying plasma and lymph S1P such as blood cells and endothelial cells. Instead, intracellular S1P plays an important role as an intermediate of the sole sphingolipid-to-glycerophospholipid metabolic pathway. The degradation of S1P by S1P lyase is the first irreversible reaction (committed step) of this pathway. This metabolic pathway is conserved in eukaryotes from yeast to human, indicating its much older origin than the function of S1P as a lipid mediator, which is found to be present only in vertebrates and chordates. The sphingolipid-to-glycerophospholipid metabolism takes place ubiquitously in mammalian tissues, and its defect causes an aberration of several tissue functions as well as abnormal lipid metabolism. Although this metabolic pathway has been known for over four decades, only recently the precise reactions and enzymes involved in this pathway have been revealed. This review will focus on the recent advances in our understanding of the sphingolipid metabolic pathway via S1P and its physiological and pathological roles. This article is part of a Special Issue entitled New Frontiers in Sphingolipid Biology.