Transforming growth factor-beta2 (TGF-beta2) stimulates the expression of pro-fibrotic connective tissue growth factor (CTGF) during the course of renal disease. Because sphingosine kinase-1 (SK-1) activity is also upregulated by TGF-beta, we studied its effect on CTGF expression and on the development of renal fibrosis. When TGF-beta2 was added to an immortalized human podocyte cell line we found that it activated the promoter of SK-1, resulting in upregulation of its mRNA and protein expression. Further, depletion of SK-1 by small interfering RNA or its pharmacological inhibition led to accelerated CTGF expression in the podocytes. Over-expression of SK-1 reduced CTGF induction, an effect mediated by intracellular sphingosine-1-phosphate. In vivo, SK-1 expression was also increased in the podocytes of kidney sections of patients with diabetic nephropathy when compared to normal sections of kidney obtained from patients with renal cancer. Similarly, in a mouse model of streptozotocin-induced diabetic nephropathy, SK-1 and CTGF were upregulated in podocytes. In SK-1 deficient mice, exacerbation of disease was detected by increased albuminuria and CTGF expression when compared to wild-type mice. Thus, SK-1 activity has a protective role in the fibrotic process and its deletion or inhibition aggravates fibrotic disease.