Sphingosine 1-phosphate (S1P) is a bioactive signaling lysophospholipid. Effects of S1P on proliferation, survival, migration, and differentiation have already been described; however, its role as a mediator of interactions between neurons and glial cells has been poorly explored. Here we describe effects of S1P, via the activation of its receptors in astrocytes, on the differentiation of neural progenitor cells (NPC) derived from either embryonic stem cells or the developing cerebral cortex. S1P added directly to NPC induced their differentiation, but S1P-primed astrocytes were able to promote even more pronounced changes in maturation, neurite outgrowth, and arborization in NPC. An increase in laminin by astrocytes was observed after S1P treatment. The effects of S1P-primed astrocytes on neural precursor cells were abrogated by antibodies against laminin. Together, our data indicate that S1P-treated astrocytes are able to induce neuronal differentiation of NPC by increasing the levels of laminin. These results implicate S1P signaling pathways as new targets for understanding neuroglial interactions within the central nervous system.