Background The greatest genetic risk factor for late-onset Alzheimer's disease (AD) is the ϵ4 allele of Apolipoprotein E (ApoE). ApoE regulates secretion of the potent neuroprotective signaling lipid Sphingosine 1-phosphate (S1P). S1P is derived by phosphorylation of sphingosine, catalysed by sphingosine kinases 1 and 2 (SphK1 and 2), and SphK1 positively regulates glutamate secretion and synaptic strength in hippocampal neurons. S1P and its receptor family have been subject to intense pharmacological interest in recent years, following approval of the immunomodulatory drug Fingolimod, an S1P mimetic, for relapsing multiple sclerosis. Results We quantified S1P levels in six brain regions that are differentially affected by AD pathology, in a cohort of 34 post-mortem brains, divided into four groups based on Braak neurofibrillary tangle staging. S1P declined with increasing Braak stage, and this was most pronounced in brain regions most heavily affected by AD pathology. The S1P/sphingosine ratio was 66% and 64% lower in Braak stage III/IV hippocampus (p = 0.010) and inferior temporal cortex (p = 0.014), respectively, compared to controls. In accordance with this change, both SphK1 and SphK2 activity declined with increasing Braak pathology in the hippocampus (p = 0.032 and 0.047, respectively). S1P/sphingosine ratio was 2.5-fold higher in hippocampus of ApoE2 carriers compared to ApoE4 carriers, and multivariate regression showed a significant association between APOE genotype and hippocampal S1P/sphingosine (p = 0.0495), suggesting a new link between APOE genotype and pre-disposition to AD. Conclusions This study demonstrates loss of S1P and sphingosine kinase activity early in AD pathogenesis, and prior to AD diagnosis. Our findings establish a rationale for further exploring S1P receptor pharmacology in the context of AD therapy.