Sprouty 2 (Spry2) acts as an inhibitor of receptor tyrosine kinase signaling in various cellular contexts. Interestingly, Spry2 also prevents the c-Cbl-induced degradation of epidermal growth factor receptor (EGFR). We compared human fibroblasts malignantly transformed by overexpression of H-Ras(V12) oncogene to their nontransformed parental cells and found that the malignant cells express a high level of Spry2. These cells also exhibited an increase in the level of EGFR compared with their precursor cells. We found that intact EGFR was required if H-Ras-transformed cells were to grow in the absence of exogenous growth factors or form large colonies in agarose. When we decreased expression of Spry2, using a Spry2-specific shRNA, the H-Ras(V12)-transformed fibroblasts could no longer form large colonies in agarose, grow in reduced levels of serum, or form tumors in athymic mice. The level of active H-Ras in these cells remained unaltered. A similar, but less pronounced, effect in tumor formation was observed when Spry2 was down-regulated in human patient-derived fibrosarcoma cell lines. In H-Ras-transformed cells Spry2 sustained the level and the downstream signaling activity of EGFR. In the parental, non-H-Ras-transformed fibroblasts, expression of Spry2 resulted in the inhibition of H-Ras and ERK activation, suggesting that the positive effect of Spry2 in tumor formation is specific to H-Ras transformation. Co-immunoprecipitation studies with H-Ras-transformed cells revealed that Spry2 and H-Ras interact and that H-Ras interacts with Spry2-binding partners, c-Cbl and CIN85, in a Spry2-dependent manner. These data show that Spry2 plays a critical role in the ability of H-Ras-transformed cells to form tumors in athymic mice.