The bioactive lipid sphingosine-1-phosphate (S1P) is a potent inducer of ML-1 thyroid cancer cell migration and invasion. It evokes migration and invasion by activating S1P receptor 1 and 3 (S1P(1,3)) and downstream signaling intermediates as well as through cross-communication with vascular endothelial growth factor receptor 2 (VEGFR2). However, very little is known about the role of S1P receptors in thyroid cancer. Furthermore, the currently used treatments for thyroid cancer have proven to be rather unsuccessful. Thus, due to the insufficiency of the available treatments for thyroid cancer, novel and targeted therapies are needed. The S1P receptor functional antagonist FTY720, an immunosuppressive drug currently used for treatment of multiple sclerosis, has shown promising effects as an inhibitor of cancer cell proliferation and invasion. In this study, we investigated the effect of FTY720 on invasion and proliferation of several thyroid cancer cell lines. We present evidence that FTY720 attenuated basal as well as S1P-evoked invasion of these cell lines. Furthermore, FTY720 potently downregulated S1P1, protein kinase C alpha (PKC alpha, PKC beta I, and VEGFR2. It also attenuated S1P-evoked phosphorylation of ERK1/2. Our results also showed that FTY720 attenuated S1P-induced MMP2 intracellular expression, S1P-induced secretion of MMP2 and MMP9, and decreased basal MMP2 and MMP9 activity. Moreover, in FTY720-treated cells, proliferation was attenuated, p21 and p27 were upregulated, and the cells were arrested in the G1 phase of the cell cycle. FTY720 attenuated cancer cell proliferation in the chick embryo chorioallantoic membrane assay. Thus, we suggest that FTY720 could be beneficial in the treatment of thyroid cancer.