Sphingosine-1-phosphate (S1P) has been implicated in tumor angiogenesis by acting through the G_i-coupled chemotactic receptor S1P₁. Here, we report that the distinct receptor S1P₂ is responsible for mediating the G_12/13/Rho-dependent inhibitory effects of S1P on Akt, Rac, and cell migration, thereby negatively regulating tumor angiogenesis and tumor growth. By using S1P₂^LacZ/+ mice, we found that S1P₂ was expressed in both tumor and normal blood vessels in many organs, in both endothelial cells (EC) and vascular smooth muscle cells, as well as in tumor-associated, CD11b-positive bone marrow–derived cells (BMDC). Lewis lung carcinoma or B16 melanoma cells implanted in S1P₂-deficient (S1P₂^−/−) mice displayed accelerated tumor growth and angiogenesis with enhanced association of vascular smooth muscle cells and pericytes. S1P₂^−/− ECs exhibited enhanced Rac activity, Akt phosphorylation, cell migration, proliferation, and tube formation in vitro. Coinjection of S1P₂^−/− ECs and tumor cells into wild-type mice also produced a relative enhancement of tumor growth and angiogenesis in vivo. S1P₂^−/− mice were also more efficient at recruiting CD11b-positive BMDCs into tumors compared with wild-type siblings. Bone marrow chimera experiments revealed that S1P₂ acted in BMDCs to promote tumor growth and angiogenesis. Our results indicate that, in contrast to endothelial S1P₁, which stimulates tumor angiogenesis, S1P₂ on ECs and BMDCs mediates a potent inhibition of tumor angiogenesis, suggesting a novel therapeutic tactic for anticancer treatment. Cancer Res; 70(2); 772–81