Ischemia reperfusion (I/R) injury following lung transplantation is exacerbated by the destruction of the endothelial cell barrier leading to pulmonary edema and dysregulated activated lymphocyte migration. Sphingosine 1-phosphate (S1P), a G-coupled protein receptor (GPCR) agonist, has been previously shown to promote endothelial cell tight junction formation and prevent monocyte chemotaxis. We asked if S1P treatment could improve pulmonary function and attenuate I/R injury following syngeneic rat lung transplantation. In comparison to vehicle-treated recipients, S1P administered before reperfusion significantly improved recipient oxygenation following transplantation. Improved graft function was associated with reduced inflammatory signaling pathway activation along with attenuated intragraft levels of MIP-2, TNF-α and IL-1β. Moreover, S1P-treated recipients had significantly less apoptotic endothelial cells, pulmonary edema and graft accumulation of neutrophils than did vehicle-treated recipients. Thus our data show that S1P improves lung tissue homeostasis following reperfusion by enhancing endothelial barrier function and blunting monocytic graft infiltration and inflammation.