Adipose dysfunction resulting from chronic inflammation and impaired adipogenesis is increasingly recognized as a major contributor to obesity-mediated insulin resistance, but the molecular mechanisms that maintain healthy adipocytes and limit adipose inflammation remain unclear. Here, we used genetic and pharmacological approaches to delineate a novel role for sphingosine kinase 1 (SK1) in metabolic disorders associated with obesity. SK1 phosphorylates sphingosine to form sphingosine 1 phosphate (S1P), a bioactive sphingolipid with numerous roles in inflammation. SK1 mRNA expression was increased in adipose tissue of diet-induced obese (DIO) mice and obese type 2 diabetic humans. In DIO mice, SK1 deficiency increased markers of adipogenesis and adipose gene expression of the anti-inflammatory molecules IL-10 and adiponectin, and reduced adipose tissue macrophage (ATM) recruitment and proinflammatory molecules TNF-α and IL-6. These changes were associated with enhanced insulin signaling in adipose and muscle and improved systemic insulin sensitivity and glucose tolerance in SK1-/- mice. Specific pharmacological inhibition of SK1 in WT DIO mice also reduced adipocyte and ATM inflammation and improved overall glucose homeostasis. These data suggest that the SK1/S1P axis could be an attractive target for the development of treatments to ameliorate adipose inflammation and insulin resistance associated with obesity and T2D.