Disruption of sphingolipid homeostasis and signaling has been implicated in diabetes, cancer, cardiometabolic, and neurodegenerative disorders. Yet, mechanisms governing cellular sensing and regulation of sphingolipid homeostasis remain largely unknown. In yeast, serine palmitoyltransferase, catalyzing the first and rate-limiting step of sphingolipid de novo biosynthesis, is negatively regulated by Orm1 and 2. Lowering sphingolipids triggers Orms phosphorylation, upregulation of serine palmitoyltransferase activity and sphingolipid de novo biosynthesis. However, mammalian orthologs ORMDLs lack the N-terminus hosting the phosphosites. Thus, which sphingolipid(s) are sensed by the cells, and mechanisms of homeostasis remain largely unknown. Here, we identify sphingosine-1-phosphate (S1P) as key sphingolipid sensed by cells via S1PRs to maintain homeostasis. The increase in S1P-S1PR signaling stabilizes ORMDLs, restraining SPT activity. Mechanistically, the hydroxylation of ORMDLs at Pro137 allows a constitutive degradation of ORMDLs via ubiquitin-proteasome pathway, preserving SPT activity. Disrupting S1PR/ORMDL axis results in ceramide accrual, mitochondrial dysfunction, impaired signal transduction, all underlying endothelial dysfunction, early event in the onset of cardio- and cerebrovascular diseases. Our discovery may provide the molecular basis for therapeutic intervention restoring sphingolipid homeostasis.