Sphingosine-1-phosphate receptor 1 (S1P1) mediated regulation of lymphocyte egress from lymphoid organs is recognized as the mechanism of FTY720 (Fingolimod, Gilenya) efficacy in relapsing-remitting forms of multiple sclerosis (RRMS). In this study we describe a novel S1P1 agonist AKP-11, next generation of S1P1 agonist, with immunomodulatory activities in cell culture model and for therapeutic efficacy against an animal model of MS, i.e. experimental autoimmune encephalomyelitis (EAE) but without the adverse effects observed with FTY720. Like FTY720, AKP-11 bound to S1P1 is internalized and activates intracellular AKT and ERKs cellular signaling pathways. In contrast to FTY720, AKP-11 mediated S1P1 downregulation is independent of sphingosine kinase activity indicating it to be a direct agonist of S1P1. The S1P1 loss and inhibition of lymphocyte egress by FTY720 leads to lymphopenia. In comparison with FTY720, oral administration of AKP-11 caused milder and reversible lymphopenia while providing a similar degree of therapeutic efficacy in the EAE animal model. Consistent with the observed reversible lymphopenia with AKP-11, the S1P1 recycled back to cell membrane in AKP-11 treated cells following its withdrawal, but not with withdrawal of FTY720. Accordingly, a smaller degree of ubiquitination and proteolysis of S1P1 was observed in AKP-11 treated cells as compared to FTY720. Consistent with previous observations, FTY720 treatment is associated with adverse effects of bradycardia and lung vascular leaks in rodents, whereas AKP-11 treatment had undetectable effects on bradycardia and reduced lung vascular leaks as compared to FTY720. Taken together, the data documents that AKP-11 treatment cause milder and reversible lymphopenia with milder adverse effects while maintaining therapeutic efficacy similar to that observed with FTY720, thus indicating therapeutic potential of AKP-11 for treatment of MS and related autoimmune disorders.