Inflammatory bowel disease is an important risk factor for colorectal cancer. We show that sphingosine-1-phosphate (S1P) produced by upregulation of sphingosine kinase 1 (SphK1) links chronic intestinal inflammation to colitis-associated cancer (CAC) and both are exacerbated by deletion of Sphk2. S1P is essential for production of the multifunctional NF-κB-regulated cytokine IL-6, persistent activation of the transcription factor STAT3, and consequent upregulation of the S1P receptor, S1PR1. The prodrug FTY720 decreased SphK1 and S1PR1 expression and eliminated the NF-κB/IL-6/STAT3 amplification cascade and development of CAC, even in Sphk2^−/− mice, and may be useful in treating colon cancer in individuals with ulcerative colitis. Thus, the SphK1/S1P/S1PR1 axis is at the nexus between NF-κB and STAT3 and connects chronic inflammation and CAC.