Non obese diabetic (NOD) mice develop spontaneous Type 1 diabetes. We have shown that NOD diabetic mice have activated aortic endothelium. Further, we have found that the sphingolipid, sphingosine-1-phosphate (S1P), reduces endothelial activation through activation of the S1P1 receptor. In the current study, we tested the hypothesis that S1P could inhibit CD4+T cell activation, thereby further reducing inflammatory events associated with atherosclerosis. CD4+ T lymphocytes were isolated from diabetic NOD and control splenocytes. Upon activation via CD3antibody, diabetic T cells secreted 2-fold more IFNγ (control, 1500pg versus 3000 pg/mg for NOD). Pretreatment with either 1μM S1P or 1μM of the S1P1 receptor agonist SEW2871 significantly reduced IFNγ secretion by 40%, (∗p<0.001). FACS analysis showed increased expression of CD69 in diabetic T cells. Both S1P and SEW2871 prevented upregulation of CD69 on CD4+ cells. Hypoxia-Inducible Factor (HIF)-1α short isoform I.1 plays an important role in the regulation of TCR-triggered cytokine secretion. HIFI.1 has been shown to negatively regulate lymphocyte activation. Quantitative RT-PCR for both HIF1α isoforms showed that diabetic NOD mice had 2.5-fold lower HIF1α I.1 mRNA than control. S1P significantly increased HIF1α I.1 mRNA levels in both groups. Thus, S1P increases HIF1α I.1 expression in CD4+ T cells, thereby regulating cell activation.