Internalized membrane proteins are either transported to late endosomes and lysosomes for degradation or recycled to the plasma membrane. Although proteins involved in trafficking and sorting have been well studied, far less is known about the lipid molecules that regulate the intracellular trafficking of membrane proteins. We studied the function of sphingosine kinases and their metabolites in endosomal trafficking using Drosophila melanogaster photoreceptors as a model system. Gain- and loss-of-function analyses show that sphingosine kinases affect trafficking of the G protein-coupled receptor Rhodopsin and the light-sensitive transient receptor potential (TRP) channel by modulating the levels of dihydrosphingosine 1 phosphate (DHS1P) and sphingosine 1 phosphate (S1P). An increase in DHS1P levels relative to S1P leads to the enhanced lysosomal degradation of Rhodopsin and TRP and retinal degeneration in wild-type photoreceptors. Our results suggest that sphingosine kinases and their metabolites modulate photoreceptor homeostasis by influencing endolysosomal trafficking of Rhodopsin and TRP.