A time-dependent decrease in S1P potency was observed in a [35S]-GTPγS binding assay using CHO-cell membranes expressing the human S1P2 receptor. After a three hour incubation with membranes the pEC50 of S1P was 7.09 ± 0.03, compared to 8.59 ± 0.10 for that obtained without pre-incubation. To determine if S1P was subjected to metabolic breakdown we developed a bioassay to measure S1P activity which confirmed the findings from the [35S]-GTPγS binding experiments. LC-MS/MS techniques were also used to measure the concentrations of S1P and its breakdown product sphingosine. In the presence of CHO-cell membranes the t1/2 of S1P breakdown to sphingosine was 42.99 ± 0.40 min, this is in contrast to that obtained without the inclusion of membranes (256.30 ± 113.84 min), confirming the metabolism of S1P in vitro. Finally, the effects of different phosphatase inhibitors were investigated to determine whether it was possible to prevent the metabolism of S1P. In the presence of sodium orthovanadate, the pEC50 for S1P obtained in the [35S]-GTPγS binding assay, after three hour pre-incubation with membranes was 8.91 ± 0.03. In contrast that obtained without Na3VO4 was 7.19 ± 0.04. These data suggest that phosphatases are active in cell membrane preparations and are responsible for S1P metabolism in vitro. In the absence of sodium orthovanadate, it is envisaged that experiments involving exogenously applied S1P to broken cell preparations, whole cells or tissues, coupled with long incubation times will be subjected to metabolism.