During DNA replication, the enzyme telomerase maintains the ends of chromosomes, called telomeres. Shortened telomeres trigger cell senescence, and cancer cells often have increased telomerase activity to promote their ability to proliferate indefinitely. The catalytic subunit, human telomerase reverse transcriptase (hTERT), is stabilized by phosphorylation. We found that the lysophospholipid sphingosine 1-phosphate (S1P), generated by sphingosine kinase 2 (SK2), bound hTERT at the nuclear periphery in human and mouse fibroblasts. Docking predictions and mutational analyses revealed that binding occurred between a hydroxyl group (C'3-OH) in S1P and Asp(684) in hTERT. Inhibiting or depleting SK2 or mutating the S1P binding site decreased the stability of hTERT in cultured cells and promoted senescence and loss of telomere integrity. S1P binding inhibited the interaction of hTERT with makorin ring finger protein 1 (MKRN1), an E3 ubiquitin ligase that tags hTERT for degradation. Murine Lewis lung carcinoma (LLC) cells formed smaller tumors in mice lacking SK2 than in wild-type mice, and knocking down SK2 in LLC cells before implantation into mice suppressed their growth. Pharmacologically inhibiting SK2 decreased the growth of subcutaneous A549 lung cancer cell-derived xenografts in mice, and expression of wild-type hTERT, but not an S1P-binding mutant, restored tumor growth. Thus, our data suggest that S1P binding to hTERT allosterically mimicks phosphorylation, promoting telomerase stability and hence telomere maintenance, cell proliferation, and tumor growth.