FTY720 is the first of a new immunomodulator class: sphingosine 1-phosphate (S1P) receptor agonist. In 1994, an immunosuppressive natural product, ISP-I (myriocin), was isolated from the culture broth of Isaria sinclairii, a type of vegetative wasp. The chemical modification of ISP-I yielded a new compound, FTY720, which has more potent immunosuppressive activity and less toxicity than ISP-I does. FTY720 has been shown to be highly effective in experimental allotransplantation models and autoimmune disease models. A striking feature of FTY720 is the induction of a marked decrease in peripheral blood T- and B-cells at doses that show immunosuppressive activity in these models. Reportedly, FTY720 is rapidly converted to FTY720-phosphate (FTY720-P) by sphingosine kinase 2 in vivo, and FTY720-P acts as a potent agonist at S1P receptors. Recently, it has been suggested that FTY720-P internalizes S1P₁ on lymphocytes and thereby inhibits the migration of lymphocytes toward S1P. Thus, it is likely that the reduction of circulating lymphocytes by FTY720 is due to the inhibition of S1P/S1P₁-dependent lymphocyte egress from secondary lymphoid tissues and thymus. Because FTY720 displays a novel mechanism of action that has not been observed with other immunosuppressive agents and shows a synergism with cyclosporin A (CsA) and tacrolimus, it is presumed that FTY720 provides a useful tool for the prevention of transplant rejection and a new therapeutic approach for autoimmune diseases including multiple sclerosis and rheumatoid arthritis.