Krabbe's disease is an autosomal recessive neurodegenerative disorder characterised by demyelination, astrocytosis and infiltration of macrophages into the brain. On the molecular level the illness is caused by accumulation of the toxic lipid metabolite galactosphingosine (psychosine) in the brain; however, our knowledge of the molecular pathology caused by psychosine accumulation remains incomplete. Here (p. 3878), Kumlesh Dev and Catherine O'Sullivan shed new light on how psychosine affects glial cell dysfunction and uncover pharmacological modulation of sphingosine 1-phosphate receptor (S1PR) activity as a putative new therapeutic intervention for Krabbe's disease. The authors find that astrocyte survival and mitochondrial membrane potential are diminished upon treatment with psychosine, indicating that apoptosis is the likely cause of astrocyte loss. Psychosine also potentiates cytokine release by lipopolysaccharide-stimulated astrocytes. Remarkably, pre-treatment with the S1PR agonist pFTY720 (pFTY) significantly attenuates these psychosine-induced phenotypes. Importantly, the authors then demonstrate that psychosine causes demyelination through a mechanism that is independent of inflammatory cytokine release, but that can be attenuated by pFTY treatment. Thus, these results not only significantly advance our knowledge of the cytotoxic consequences of psychosine accumulation but also provide preliminary data in support of S1PR modulation as an attractive therapeutic target in Krabbe's disease.