We previously demonstrated that sphingosine kinase 1 (Sphk1) expression and activity are up-regulated by exogenous palmitate (PAL) in a skeletal muscle model system and in diet-induced obesity in mice; however, potential functions and in vivo relevance of this have not been addressed. Here, we aimed to determine the mechanism by which PAL regulates SphK1 in muscle, and to determine potential roles for its product, sphingosine-1-phosphate (S1P), in muscle biology in the context of obesity. Cloning and analysis of the mouse Sphk1 promoter revealed a peroxisome proliferator-activated receptor (PPAR) α cis-element that mediated activation of a reporter under control of the Sphk1 promoter; direct interaction of PPARα was demonstrated by chromatin immunoprecipitation. PAL treatment induced the proinflammatory cytokine interleukin (IL)-6 in a manner dependent on SphK1, and this was attenuated by inhibition of the sphingosine-1-phosphate receptor 3 (S1PR3). Diet-induced obesity in mice demonstrated that IL-6 expression in muscle, but not adipose tissue, increased in obesity, but this was attenuated in Sphk1(-/-) mice. Moreover, plasma IL-6 levels were significantly decreased in obese Sphk1(-/-) mice relative to obese wild type mice, and muscle, but not adipose tissue IL-6 signaling was activated. These data indicate that PPARα regulates Sphk1 expression in the context of fatty acid oversupply and links PAL to muscle IL-6 production. Moreover, this function of SphK1 in diet-induced obesity suggests a potential role for SphK1 in obesity-associated pathological outcomes.