The lipid mediator sphingosine-1-phosphate (S1P) plays multiple critical roles during embryogenesis. The earliest known function is for heart tube formation, revealed by the mil mutant, which is caused by a defective S1P receptor gene (s1pr2). S1P can only be generated by phosphorylation of a sphingosine precursor, and only one sphingosine kinase gene (sphk2) is expressed during zebrafish embryogenesis. Therefore, we generated sphk2 mutants to determine if there are earlier or receptor-independent functions for S1P. A maternal zygotic mutant for sphk2 (sphk2MZ) phenocopies mil, suggesting that sphk2 transmits essential migrational cues to the precardiac mesoderm during formation of the heart tube. However, we also noticed a slight developmental delay, and that sphk2MZ embryos have elevated sphingosine levels. Compared to wildtype embryos, mutant embryos are sensitive to exogenous treatment with sphingosine. This results in a gastrulation defect and early embryonic lethality, which is phenocopied by morpholino knockdown of sphk2. We considered that the phenotype could be caused by excessive sphingosine, rather than a lack of S1P, and that sphk2MZ embryos might be depleting sphingosine by another mechanism. Indeed, we observed a striking increase in transcript levels of the ceramide synthase 2b gene (cers2b) in sphk2MZ embryos, but not in morphants. The transcriptional response to increased sphingosine levels is recapitulated on a reporter regulated by the cers2b promoter, and we mapped the minimal sequences essential for the sphingosine response. This is the first report of a transcriptional sphingosine response element (SphRE). These results indicate that sphk2MZ embryos up-regulate a salvage pathway for sphingosine turnover to protect embryos from enhanced sphingosine levels in the absence of Sphk activity.