Sphingosine-1-phosphate lyase (SPL) is a highly conserved enzyme that catalyses the final step of sphingolipid degradation, namely the irreversible cleavage of the carbon chain at positions 2-3 of a long-chain base phosphate (LCBP), thereby yielding a long-chain aldehyde and phosphoethanolamine. LCBPs are potent signaling molecules involved in cell proliferation, survival, migration, cell-cell interactions and cell stress responses. Therefore, tight regulation of LCBP signaling is required for proper cell function, and perturbations of this system can lead to alterations in biological processes including development, reproduction and physiology. SPL is a key enzyme in regulating the intracellular and circulating levels of LCBPs and is, therefore, gaining attention as a putative target for pharmacological intervention. This review provides an overview of our current understanding of SPL structure and function, mechanisms involved in SPL regulation and the role of SPL in development and disease.