FTY720, a potent immunomodulatory drug in phase 2/3 clinical trials, induces rapid and reversible sequestration of lymphocytes into secondary lymphoid organs, thereby preventing their migration to sites of inflammation. As prerequisite for its function, phosphorylation of FTY720 to yield a potent agonist of the sphingosine-1-phosphate receptor S1P₁ is required in vivo, catalyzed by an as-yet-unknown kinase. Here, we report on the generation of sphingosine kinase 2 (SPHK2) knockout mice and demonstrate that this enzyme is essential for FTY720 phosphate formation in vivo. Consequently, administration of FTY720 does not induce lymphopenia in SPHK2-deficient mice. After direct dosage of FTY720 phosphate, lymphopenia is only transient in this strain, indicating that SPHK2 is constantly required to maintain FTY720 phosphate levels in vivo.