Sphingosine-1-phosphate (S1P) is a lipid that functions as a metabolic intermediate and a cellular signaling molecule. These roles are integrated when compartments with differing extracellular S1P concentrations are formed that serve to regulate functions within the immune and vascular systems, as well as during pathologic conditions. Gradients of S1P concentration are achieved by the organization of cells with specialized expression of S1P metabolic pathways within tissues. S1P concentration gradients underpin the ability of S1P signaling to regulate in vivo physiology. This review will discuss the mechanisms that are necessary for the formation and maintenance of S1P gradients, with the aim of understanding how a simple lipid controls complex physiology. This article is part of a Special Issue entitled Advances in Lysophospholipid Research.