Sphingosine kinase 1 (SK1), one of two SK enzymes, is highly regulated and has been shown to act as a focal point for the action of many growth factors and cytokines. SK1 leads to generation of sphingosine-1-phosphate (S1P) and potentially the activation of S1P receptors to mediate biologic effects. Our previous studies implicated SK1/S1P in the regulation of inflammatory processes, specifically in inflammatory bowel disease (IBD). These studies were conducted using a total body knockout mouse for SK1 and were unable to determine the source of SK1/S1P (hematopoietic or extra-hematopoietic) involved in the inflammatory responses. Therefore, bone marrow transplants were performed with wild-type (WT) and SK1-/- mice and colitis induced with dextran sulfate sodium (DSS). Irrespective of the source of SK1/S1P, bone marrow or tissue, DSS induced colitis in all mice; however, mice lacking SK1 in both hematopoietic and extra-hematopoietic compartments exhibited decreased crypt damage. Systemic inflammation was assessed, and mice with WT bone marrow demonstrated significant neutrophilia in response to DSS. In the local inflammatory response, mice lacking SK1/S1P in either bone marrow or tissue exhibited decreased induction of cytokines and less activation of STAT3 (signal transducer and activator of transcription 3). Interestingly, we determined that extra-hematopoietic SK1 is necessary for the induction of cyclooxygenase 2 (COX2) in colon epithelium in response to DSS-induced colitis. Taken together our data suggest that hematopoietic-derived SK1/S1P regulates specific aspects of the systemic inflammatory response, while extra-hematopoietic SK1 in the colon epithelium is necessary for the autocrine induction of COX2 in DSS-induced colitis.