Technical Abstract: In-vivo and in-vitro studies suggest a crucial role for Sphingosine 1-phosphate (S1P) and its receptors in the development of the nervous system. Dihydrosphingosine 1-phosphate (dhS1P), a reduced form of S1P, is an active ligand at S1P receptors, but the pharmacology and physiology of dhS1P has not been widely studied. The mycotoxin fumonisin B1(FB1) is a potent inhibitor of the enzyme ceramide synthase and causes selective accumulation of dihydrosphingosine and dhS1P. Recent studies suggest that maternal exposure to FB1 is correlated with the development of neural tube defects (NTDs) in which the neural epithelial progenitor cells of the developing brain fail to fuse. We hypothesize that altered signaling by S1P and dhS1P in neural epithelial cells contributes to the developmental effects of FB1. The goal of this work was to first define the effect of FB1 exposure on levels of sphingosine and dh-sphingosine levels and their receptor active 1-phosphate derivatives in human embryonic stem cell-derived neural epithelial progenitor (hES-NEP) cells; and second, to define the relative activity of dhS1P and S1P in hES-NEP cells. Specifically, dhS1P is a more potent stimulator of inhibition of cAMP and Smad phosphorylation than is S1P in neural progenitors, and this difference in apparent potency may be due to more persistent presence of extracellular dh-S1P applied to human neural progenitors rather than a higher activity at S1P receptors. This study establishes hES-NEP cells as a useful human in vitro model system to study the mechanism of FB1 toxicity and the molecular pharmacology of sphingolipid signaling cascades.