Fingolimod (FTY720) is a sphingosine 1 phosphate (S1P) analogue that inhibits ceramide synthesis in vitro, and is clinically approved for treating multiple sclerosis (MS). Since ceramide accumulation is associated with insulin resistance, we examined whether FTY720 would prevent ceramide accumulation in tissues of high fat-fed mice and subsequently improve glucose homeostasis. In addition to effects on ceramide, we aimed to examine whether FTY720 would have additional effects on lipid metabolism. C57Bl/6 mice were fed either a chow or high fat-diet (HFD) for 6 weeks after which they were treated with vehicle or FTY720 daily for a further 6 weeks. Mice underwent phenotypic analysis to assess glucose tolerance and aspects of tissue lipid and energy metabolism. HFD mice treated with FTY720 accumulated less fat compared with HFD vehicle treated mice. This was associated with an improvement in glucose tolerance and a reduction in fasting plasma insulin levels. While the HFD resulted in ceramide accumulation in adipose tissue and skeletal muscle, FTY720 prevented this. In addition to effects on ceramide, FTY720 also prevented the HFD-induced increase in diacylglycerol (DAG) and triacylglycerol (TAG) in skeletal muscle and liver. FTY720 also attenuated the HFD-induced increase in palmitate uptake, oxidation and esterification into DAG in skeletal muscle, which was associated with a reduction in CD36 expression. Furthermore, FTY720 treatment increased the activity of AMP kinase in liver. FTY720 improves glucose tolerance in high fat-fed mice by exerting beneficial effects on liver and muscle lipid metabolism. Thus FTY720, a drug already in the clinic for the treatment of MS, may have therapeutic potential for treating insulin resistance.