Genetic studies have suggested a functional link between cholesterol/sphingolipid metabolism and endocytic membrane traffic. Here we show that perturbing the cholesterol/sphingomyelin balance in the plasma membrane results in the massive formation of clusters of narrow endocytic tubular invaginations positive for N-BAR proteins. These tubules are intensely positive for sphingosine kinase 1 (SPHK1). SPHK1 is also targeted to physiologically occurring early endocytic intermediates, and is highly enriched in nerve terminals, which are cellular compartments specialized for exo/endocytosis. Membrane recruitment of SPHK1 involves a direct, curvature-sensitive interaction with the lipid bilayer mediated by a hydrophobic patch on the enzyme’s surface. The knockdown of SPHKs results in endocytic recycling defects, and a mutation that disrupts the hydrophobic patch of Caenorhabditis elegans SPHK fails to rescue the neurotransmission defects in loss-of-function mutants of this enzyme. Our studies support a role for sphingosine phosphorylation in endocytic membrane trafficking beyond the established function of sphingosine-1-phosphate in intercellular signalling.