Fingolimod (also known as FTY720) is an orally available sphingosine-1-phosphate (S1P) receptor modulator that has unique and potent immunoregulatory properties. Mechanistic studies indicate that on phosphorylation fingolimod can bind with high affinity to S1P₁ receptors. Persistent modulation of lymphocyte S1P₁ receptors by fingolimod and the subsequent internalization of these receptors inhibits lymphocyte egress from the lymph nodes, and prevents these cells from infiltrating inflammatory lesions in the CNS. Results of two phase III studies—FREEDOMS and TRANSFORMS—support previous phase II trial observations indicating that fingolimod exerts powerful anti-inflammatory effects in relapsing–remitting multiple sclerosis (MS). Fingolimod might, therefore, be one of the first orally active drug therapies available for the treatment of relapsing–remitting MS. Moreover, results from preclinical studies suggest that fingolimod might promote neural repair in vivo. In this article, we review the background to these findings, present the proposed immunological and neurobiological profile of fingolimod, discuss the data from the FREEDOMS and TRANSFORMS trials, and provide an expert opinion regarding the future of next-generation S1P receptor modulators for MS therapy.