Fingolimod (1b) is an immunomodulating, United States Food and Drug Administration (USFDA) approved Active Pharmaceutical Ingredients (API), which is one of the best drugs available for the treatment of Multiple Sclerosis (MS). Fingolimod was synthesized in seven steps using cheapest commercially inexpensive raw material octanophenone which meets high yield and purity. While developing the process of Fingolimod, some related impurities were observed. These impurities were recognized as Heptyl PNP (2a), Octyl PNP (2b), Nonyl PNP (2c), Nitro heptyl (3a), Nitro octyl (3b), Nitro nonyl (3c), Heptyl (1a) and Nonyl (1c) impurities. The present work explains the synthesis of fingolimod, its impurities and their characterization.