Fingolimod (FTY720) is the first substance in the new immunomodulator class called sphingosine 1-phosphate (S1P) receptor modulators. We isolated an immunosuppressive natural product, myrocin, from the culture broth of Isaria sinclairii, a kind of vegetative wasp. The chemical modification of myriocin yielded a new compound, FTY720, which has more potent immunosuppressive activity and less toxicity than myriocin. FTY720 has been shown to be highly effective in experimental allograft models and autoimmune disease models such as autoimmune encephalomyelitis, collagen-induced arthritis, and lupus nephritis. The most striking feature of FTY720 is the induction of a marked decrease in peripheral blood lymphocytes at doses that show immunosuppressive activity in these models. FTY720 is rapidly converted to FTY720-phosphate (FTY720-P) by sphingosine kinases. FTY720-P acts as a potent agonist at S1P receptor type 1 (S1P₁), internalizes S1P₁ on lymphocytes, and inhibits the migration of lymphocytes toward S1P. It is highly likely that the reduction of peripheral blood lymphocytes by FTY720 is due to the inhibition of S1P₁-dependent lymphocyte egress from secondary lymphoid organs and thymus. Recently, it has been reported that FTY720 exerted considerable therapeutic effects in a placebo-controlled clinical trail involving patients with relapsing multiple sclerosis. Patients who received FTY720 orally had a significant reduction in the clinical disease activity, the number of lesions in the central nervous system, and the relapse rates. Since FTY720 possesses a new mechanism of action that has not been observed with other immunosuppressive agents, it is believed that FTY720 provides a new therapeutic approach for autoimmune diseases including multiple sclerosis.