Mast cells play a central role in inflammatory and immediate-type allergic reactions by secreting a variety of biologically active substances, including sphingosine-1 phosphate (S1P). Sphingosine kinase 1 (SphK1) and formation of S1P, which leads to transactivation of S1P receptors and their downstream signaling pathways, regulates mast-cell functions initiated by cross-linking of the high-affinity immunoglobulin E (IgE) receptor FcepsilonRI. Surprisingly, overexpression of SphK1 in rat basophilic leukemia (RBL)-2H3 mast cells impaired degranulation as well as migration toward antigen. These effects were reversed by serum withdrawal, yet the increased formation and secretion of S1P were the same as in the presence of serum. Nonetheless, serum increased localization of SphK1 at the plasma membrane. This restricted formation of S1P induced internalization and desensitization of S1P receptors on the surface of mast cells as determined by confocal immunofluorescence microscopy, aberrant S1P receptor signaling, and lack of S1P receptor coupling to G proteins. Serum starvation, which significantly reduced membrane-associated SphK1 activity, restored S1P receptor functions. Our results have important implications for mast-cell migration and degranulation as well as for the biologic functions of the S1P receptors on cells that are circulating in the bloodstream.