Mechanical ventilation (MV) performed in respiratory failure patients to maintain lung function leads to ventilator-induced lung injury (VILI). This study investigates the role of sphingolipids and sphingolipid metabolizing enzymes in VILI using a rodent model of VILI and alveolar epithelial cells subjected to cyclic stretch (CS). MV (0 PEEP (Positive End Expiratory Pressure), 30 mL/kg, 4 h) in mice enhanced sphingosine-1-phosphate lyase (S1PL) expression, and ceramide levels, and decreased S1P levels in lung tissue, thereby leading to lung inflammation, injury and apoptosis. Accumulation of S1P in cells is a balance between its synthesis catalyzed by sphingosine kinase (SphK) 1 and 2 and catabolism mediated by S1P phosphatases and S1PL. Thus, the role of S1PL and SphK1 in VILI was investigated using Sgpl1^+/− and Sphk1^−/− mice. Partial genetic deletion of Sgpl1 protected mice against VILI, whereas deletion of SphK1 accentuated VILI in mice. Alveolar epithelial MLE-12 cells subjected to pathophysiological 18% cyclic stretch (CS) exhibited increased S1PL protein expression and dysregulation of sphingoid bases levels as compared to physiological 5% CS. Pre-treatment of MLE-12 cells with S1PL inhibitor, 4-deoxypyridoxine, attenuated 18% CS-induced barrier dysfunction, minimized cell apoptosis and cytokine secretion. These results suggest that inhibition of S1PL that increases S1P levels may offer protection against VILI.