The discovery of 1-({6-[(2-methoxy-4-propylbenzyl)oxy]-1-methyl-3,4-dihydronaphthalen-2-yl}methyl)azetidine-3-carboxylic acid 13n (ceralifimod, ONO-4641), a sphingosine-1-phosphate (S1P) receptor agonist selective for S1P1 and S1P5, is described. While it has been revealed that the modulation of the S1P1 receptor is an effective way to treat autoimmune diseases such as relapsing-remitting multiple sclerosis (RRMS), it was also reported that activation of the S1P3 receptor is implicated in some undesirable effects. We carried out a structure-activity relationship (SAR) study of hit compound 6 with an amino acid moiety in the hydrophilic head region. Following identification of a lead compound with a dihydronaphthalene central core by inducing conformational constraint, optimization of the lipophilic tail region led to the discovery of 13n as a clinical candidate that exhibited >30 000-fold selectivity for S1P1 over S1P3 and was potent in a peripheral lymphocyte lowering (PLL) test in mice (ED50 = 0.029 mg/kg, 24 h after oral dosing).