Sprouty2 (Spry2), a negative feedback regulator of the Ras/mitogen-activated protein kinase (MAPK) pathway, is frequently down-regulated in human hepatocellular carcinoma (HCC). We tested the hypothesis that loss of Spry2 cooperates with unconstrained activation of the c-Met protooncogene to induce hepatocarcinogenesis via in vitro and in vivo approaches. We found coordinated down-regulation of Spry2 protein expression and activation of c-Met as well as its downstream effectors extracellular signal-regulated kinase (ERK) and v-akt murine thymoma viral oncogene homolog (AKT) in a subset of human HCC samples with poor outcome. Mechanistic studies revealed that Spry2 function is disrupted in human HCC via multiple mechanisms at both transcriptional and post-transcriptional level, including promoter hypermethylation, loss of heterozygosity, and proteosomal degradation by neural precursor cell expressed, developmentally down-regulated 4 (NEDD4). In HCC cell lines, Spry2 overexpression inhibits c-Met-induced cell proliferation as well as ERK and AKT activation, whereas loss of Spry2 potentiates c-Met signaling. Most importantly, we show that blocking Spry2 activity via a dominant negative form of Spry2 cooperates with c-Met to promote hepatocarcinogenesis in the mouse liver by sustaining proliferation and angiogenesis. The tumors exhibited high levels of activated ERK and AKT, recapitulating the subgroup of human HCC with a clinically aggressive phenotype. Conclusion: The occurrence of frequent genetic, epigenetic, and biochemical events leading to Spry2 inactivation provides solid evidence that Spry2 functions as a tumor suppressor gene in liver cancer. Coordinated deregulation of Spry2 and c-Met signaling may be a pivotal oncogenic mechanism responsible for unrestrained activation of ERK and AKT pathways in human hepatocarcinogenesis. (HEPATOLOGY 2010;52:506-517) H uman hepatocellular carcinoma (HCC) is a leading cause of cancer-related deaths worldwide, with limited treatment options and high mortality rate. 1 Hepatocarcinogenesis is a multi-phase process involving the deregulation of various signaling pathways. 1 In particular, activation of the Ras/ mitogen-activated protein kinase (MAPK) pathway is ubiquitous in human HCC. 2 The importance of the Abbreviations: EGFR, epithelial growth factor receptor; ERK, extracellular signal-regulated kinase; FGF, fibroblast growth factor; HCA, hepatocellular adenoma; HCC, hepatocellular carcinoma; HCCB, hepatocellular carcinoma with better outcome; HCCP, hepatocellular carcinoma with poorer outcome; HE, hematoxylineosin; HGF, hepatocyte growth factor; LOH, loss of heterozygosity; MAPK, mitogen-activated protein kinase; mRNA, messenger RNA; mTOR, mammalian target of rapamycin; NEDD4, neural precursor cell expressed, developmentally down-regulated 4;