Sphingosine 1-phosphate (S1P) is an essential lipid metabolite that signals through a family of five G protein-coupled receptors, S1PR1-S1PR5, to regulate cell physiology. The multiple sclerosis drug Fingolimod (FTY720) is a potent S1P receptor agonist that causes peripheral lymphopenia. Recent research has demonstrated direct neuroprotective properties of FTY720 in several neurodegenerative paradigms; however, neuroprotective properties of the native ligand S1P have not been established. We aimed to establish the significance of neurotrophic factor up-regulation by S1P for neuroprotection, comparing S1P with FTY720. S1P induced brain-derived neurotrophic factor (BDNF), leukemia inhibitory factor (LIF), platelet-derived growth factor B (PDGFB), and heparin-binding EGF-like growth factor (HBEGF) gene expression in primary human and murine astrocytes, but not in neurons, and to a much greater extent than FTY720. Accordingly, S1P but not FTY720 protected cultured neurons against excitotoxic cell death in a primary murine neuron-glia coculture model, and a neutralizing antibody to LIF blocked this S1P-mediated neuroprotection. Antagonists of S1PR1 and S1PR2 both inhibited S1P-mediated neurotrophic gene induction in human astrocytes, indicating that simultaneous activation of both receptors is required. S1PR2 signaling was transduced through Gα13 and the small GTPase Rho, and was necessary for the up-regulation and activation of the transcription factors FOS and JUN, which regulate LIF, BDNF, and HBEGF transcription. In summary, we show that S1P protects hippocampal neurons against excitotoxic cell death through up-regulation of neurotrophic gene expression, particularly LIF, in astrocytes. This up-regulation requires both S1PR1 and S1PR2 signaling. FTY720 does not activate S1PR2, explaining its relative inefficacy compared to S1P.