The lyso-phospholipid sphingosine 1-phosphate modulates lymphocyte trafficking, endothelial development and integrity, heart rate, and vascular tone and maturation by activating G protein–coupled sphingosine 1-phosphate receptors. Here, we present the crystal structure of the sphingosine 1-phosphate receptor 1 fused to T4-lysozyme (S1P₁-T4L) in complex with an antagonist sphingolipid mimic. Extracellular access to the binding pocket is occluded by the amino terminus and extracellular loops of the receptor. Access is gained by ligands entering laterally between helices I and VII within the transmembrane region of the receptor. This structure, along with mutagenesis, agonist structure-activity relationship data, and modeling, provides a detailed view of the molecular recognition and requirement for hydrophobic volume that activates S1P₁, resulting in the modulation of immune and stromal cell responses.