The purpose of this study was to investigate how Sphingosine-1-phosphate (S1P) signaling regulates glial phenotype, neuroprotection, and reprogramming of Müller glia (MG) into neurogenic MG-derived progenitor cells (MGPCs) in the adult mouse retina. We found that S1P-related genes were dynamically regulated following retinal damage. S1pr1 (encoding S1P receptor 1) and Sphk1 (encoding sphingosine kinase 1) are expressed at low levels by resting MG and are rapidly upregulated following acute damage. Overexpression of the neurogenic bHLH transcription factor Ascl1 in MG downregulates S1pr1, and inhibition of Sphk1 and S1pr1/3 enhances Ascl1-driven differentiation of bipolar-like cells and suppresses glial differentiation. Treatments that activate S1pr1 or increase retinal levels of S1P initiate pro-inflammatory NFκB-signaling in MG, whereas treatments that inhibit S1pr1 or decreased levels of S1P suppress NFκB-signaling in MG in damaged retinas. Conditional knock-out of NFκB-signaling in MG increases glial expression of S1pr1 but decreases levels of S1pr3 and Sphk1. Conditional knock-out (cKO) of S1pr1 in MG, but not Sphk1, enhances the accumulation of immune cells in acutely damaged retinas. cKO of S1pr1 is neuroprotective to ganglion cells, whereas cKO of Sphk1 is neuroprotective to amacrine cells in NMDA-damaged retinas. Consistent with these findings, pharmacological treatments that inhibit S1P receptors or inhibit Sphk1 had protective effects upon inner retinal neurons. We conclude that the S1P-signaling pathway is activated in MG after damage and this pathway acts secondarily to restrict the accumulation of immune cells, impairs neuron survival and suppresses the reprogramming of MG into neurogenic progenitors in the adult mouse retina.