The sphingolipids sphingosine-1-phosphate (S1P) and ceramide are important bioactive lipids with many cellular effects. Intracellular ceramide accumulation causes insulin resistance, but sphingosine kinase 1 (SphK1) prevents ceramide accumulation, in part, by promoting its metabolism into S1P. Despite this, the role of SphK1 in regulating insulin action has been largely overlooked. Transgenic (Tg) mice that overexpress SphK1 were fed a standard chow or high-fat diet (HFD) for 6 weeks before undergoing several metabolic analyses. SphK1 Tg mice fed an HFD displayed increased SphK activity in skeletal muscle, which was associated with an attenuated intramuscular ceramide accumulation compared with wild-type (WT) littermates. This was associated with a concomitant reduction in the phosphorylation of c-jun amino-terminal kinase, a serine threonine kinase associated with insulin resistance. Accordingly, skeletal muscle and whole-body insulin sensitivity were improved in SphK1 Tg, compared with WT mice, when fed an HFD. We have identified that the enzyme SphK1 is an important regulator of lipid partitioning and insulin action in skeletal muscle under conditions of increased lipid supply.