The Sprouty proteins are increasingly being recognized to be deregulated in various types of cancers. This deregulation is often associated with aberrant signaling of receptor tyrosine kinases and its downstream effectors, leading to the mitogen-activated protein kinase (MAPK) signaling pathway. In human hepatocellular carcinoma, where the MAPK activity is enhanced via multiple hepatocarcinogenic factors, we observed a consistent reduced expression of the sprouty 2 (Spry2) transcript and protein in malignant hepatocytes compared with normal or cirrhotic hepatocytes. The expression pattern of Spry2 in hepatocellular carcinoma resembles that of several potential tumor markers of hepatocellular carcinoma and also that of several angiogenic factors and growth factor receptors. In contrast to previous studies of Spry2 down-regulation in other cancers, we have ruled out loss of heterozygosity or the methylation of promoter sites, two common mechanisms responsible for the silencing of genes with tumor suppressor properties. Functionally, we show that Spry2 inhibits both extracellular signal-regulated kinase signaling as well as proliferation in hepatocellular carcinoma cell lines, whereas knocking down Spry2 levels in NIH3T3 cells causes mild transformation. Our study clearly indicates a role for Spry2 in hepatocellular carcinoma, and an understanding of the regulatory controls of its expression could provide new means of regulating the angiogenic switch in this hypervascular tumor, thereby potentially controlling tumor growth.