Sphingosine 1-phosphate lyase (SPL) is the terminal enzyme that controls the degradation of the bioactive lipid sphingosine 1-phosphate (S1P) within an interconnected sphingolipid metabolic network. The unique metabolic position of SPL in maintaining S1P levels implies SPL could be an emerging new therapeutic target. Over the past decade, an evolving effort has been made to unravel the role of SPL in the nervous system; however, to what extent SPL influences the developing and mature nervous system through altering S1P biosynthesis remains opaque. While congenital SPL deletion is associated with deficits in the developing nervous system, the loss of SPL activity in adults appears to be neuroprotective in acquired neurological disorders. The controversial findings concerning SPL's role in the nervous system are further constrained by the current genetic and pharmacological tools. This review attempts to focus on the multi-faceted nature of SPL function in the mammalian nervous systems, implying its dichotomy in the developing and adult central nervous system (CNS). This article also highlights SPL is emerging as a therapeutic molecule that can be selectively targeted to modulate S1P for the treatment of acquired neurodegenerative diseases, raising new questions for future investigation. The development of cell-specific inducible conditional SPL mutants and selective pharmacological tools will allow the precise understanding of SPL's function in the adult CNS, which will aid the development of a new strategy focusing on S1P-based therapies for neuroprotection.