Sphingosine kinase 1 is an agonist‐activated signalling enzyme that catalyses the formation of sphingosine 1‐phosphate, a lipid second messenger that has been implicated in a number of agonist‐driven cellular responses, including stimulation of cell proliferation, inhibition of apoptosis and expression of inflammatory molecules. Although agonist‐induced stimulation of sphingosine kinase activity is critical in a number of signalling pathways, nothing has been known of the molecular mechanism of this activation. Here we show that this activation results directly from phosphorylation of sphingosine kinase 1 at Ser225, and present several lines of evidence to show compellingly that the activating kinase is ERK1/2 or a close relative. Furthermore, we show that phosphorylation of sphingosine kinase 1 at Ser225 results not only in an increase in enzyme activity, but is also necessary for translocation of the enzyme from the cytosol to the plasma membrane. Thus, these studies have elucidated the mechanism of agonist‐mediated sphingosine kinase activation, and represent a key finding in understanding the regulation of sphingosine kinase/sphingosine 1‐phosphate‐controlled signalling pathways.