Background Sphingosine Kinase (SphK) that catalyzes sphingosine (Sph) to sphingosine 1-phosphate (S1P), plays a key role in both sphingolipid metabolism and cellular signaling. Experimental studies suggest a crucial implication of SphK in the pathogenesis of type 2 diabetes mellitus (T2DM). However, the relationship between SphK and T2DM have been underexplored in humans. Herein, we aimed to investigate whether circulating SphK-related metabolites are associated with T2DM incidence in a prospective cohort. Methods Mice lacking SphK (including Sphk1-/- and Sphk2-/-) were used for establishing a methodology for measurement of circulating SphK-related sphingolipid metabolites, including Sph, S1P, dihydrosphingosine (dhSph) and dihydro-S1P (dhS1P) in serum. By accessing to an established prospective cohort that involves a total of 2486 non-diabetic adults at baseline, 100 subjects who developed T2DM after a mean follow-up of 4.2-years, along with 100 control subjects matched strictly with age, sex, BMI and fasting plasma glucose, were randomly enrolled for the study. Results Sphk1-/- mice exhibited a significant decrease in circulating levels of S1P and its ratio to Sph, whereas dhS1P levels and dhS1P/dhSph ratio dramatically decreased in Sphk2-/- mice. In human studies, compared to the control group, medians (interquartile range) of serum dhS1P (132.0 (109.5-163.3) vs 153.0 (128.0-189.2) nmol/L, P = 0.002) and dhS1P/dhSph ratio (42.2 (34.0-52.6) vs 50.7 (44.0-64.7), P<0.001) at baseline were elevated significantly prior to the onset of diabetes. Each SD increment of dhS1P and dhS1P/dhSph ratio was associated with 53.5% and 54.1% increased risk of incident diabetes, respectively. The effect of circulating dhS1P and dhS1P/dhSph ratio on T2DM incidence was independent of conventional risk factors, including age, sex, BMI, plasma glucose, blood pressure and serum lipid profiles in multivariate regression models. Furthermore, combination of serum dhS1P and dhS1P/dhSph ratio with conventional clinical indices significantly improved the accuracy of T2DM prediction (AUROC, 0.726; 95%CI, 0.647-0.805), especially for normoglycemic subjects (AUROC, 0.859; 95%CI, 0.767-0.924). Conclusion Circulating levels of dhS1P and dhS1P/dhSph ratio are strongly associated with increased risk of T2DM, and could serve as a useful biomarker for prediction of incident T2DM in normoglycemic populations.