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More recently, sphingosine 1-phosphate (S1P), another bioactive sphingolipid derivative, has also been shown to increase in T2D and obesity. Although many studies propose a protective role of S1P metabolism on insulin signaling in peripheral tissues, other studies suggest a causal role of S1P on insulin resistance. In this review, we critically summarize the current state of knowledge of S1P metabolism and its modulating role on insulin resistance. A particular emphasis is placed on S1P and insulin signaling in hepatocytes, skeletal muscle