Sphingosine kinase (SphK) is an important signalling enzyme that catalyses the phosphorylation of sphingosine (Sph) to form sphingosine-1-phosphate (S1P). The multifunctional lipid, S1P binds to a family of five G protein-coupled receptors (GPCRs). As an intracellular second messenger, S1P activates key signalling cascades responsible for the maintenance of sphingolipid metabolism, and has been implicated in the progression of cancer, and the development of other inflammatory and metabolic diseases. SphK and S1P are critical molecules involved in the regulation of various cellular metabolic processes, such as cell proliferation, survival, apoptosis, adhesion and migration. There is strong evidence supporting the critical roles of SphK and S1P in the progression of diabetes mellitus, including insulin sensitivity and insulin secretion, pancreatic ß-cell apoptosis, and the development of diabetic inflammatory state. In this review, we summarise the current state of knowledge for SphK/S1P signalling effects, associated with the development of insulin resistance, pancreatic ß-cell death and the vascular complications of diabetes mellitus.