During angiogenesis, nascent vascular sprouts fuse to form vascular networks, enabling efficient circulation. Mechanisms that stabilize the vascular plexus are not well understood. Sphingosine 1-phosphate (S1P) is a blood-borne lipid mediator implicated in the regulation of vascular and immune systems. Here we describe a mechanism by which the G protein-coupled S1P receptor-1 (S1P1) stabilizes the primary vascular network. A gradient of S1P1 expression from the mature regions of the vascular network to the growing vascular front was observed. In the absence of endothelial S1P1, adherens junctions are destabilized, barrier function is breached, and flow is perturbed, resulting in abnormal vascular hypersprouting. Interestingly, S1P1 responds to S1P as well as laminar shear stress to transduce flow-mediated signaling in endothelial cells both in vitro and in vivo. These data demonstrate that blood flow and circulating S1P activate endothelial S1P1 to stabilize blood vessels in development and homeostasis.