Sphingosine kinase-1 (SK1) has emerged as a key component of cytokine responses, including roles in apoptosis, yet the specific mechanisms by which cytokines regulate SK1 in the apoptotic responses have not been studied. In this study, we show that prolonged treatment of MCF-7 cells with tumor necrosis factor (TNF) induces a dose- and time-dependent decrease in SK1 protein. Inhibition of the upstream caspase 8 by IETD significantly rescued TNF effects on SK1, yet the caspase 7 inhibitor DEVD failed to have any effect, suggesting that the decline in SK1 occurs downstream of the initiator caspase but upstream of the effector caspase. In addition to caspase activation, TNF caused disruption of lysosomes with relocation of the cysteine protease cathepsin B into the cytosol. Down-regulation of cathepsin B using small interfering RNA significantly restored SK1 levels following exposure to TNF, suggesting that SK1 loss was dependent on cathepsin B activity. The regulation of SK1 by the lysosomal protease was further supported by the colocalization of SK1 with the lysosome and cathepsin B in cells and the loss of the colocalization following exposure to TNF. The ability of cathepsin B to regulate SK1 was further corroborated by an in vitro approach where recombinant cathepsin B cleaved SK1 at multiple sites to produce several cleavage fragments. Therefore, these studies show that SK1 down-regulation by TNF is dependent on the "lysosomal pathway" of apoptosis and specifically on cathepsin B, which functions as an SK1 protease in cells.