Spred/Sprouty family proteins negatively regulate growth factor-induced ERK activation. Although the individual physiological roles of Spred-1 and Spred-2 have been investigated using gene-disrupted mice, the overlapping functions of Spred-1 and Spred-2 have not been clarified. Here, we demonstrate that the deletion of both Spred-1 and Spred-2 resulted in embryonic lethality at embryonic days 12.5 to 15.5 with marked subcutaneous hemorrhage, edema, and dilated lymphatic vessels filled with erythrocytes. This phenotype resembled that of Syk^−/− and SLP-76^−/− mice with defects in the separation of lymphatic vessels from blood vessels. The number of LYVE-1-positive lymphatic vessels and lymphatic endothelial cells increased markedly in Spred-1/2-deficient embryos compared with WT embryos, while the number of blood vessels was not different. Ex vivo colony assay revealed that Spred-1/2 suppressed lymphatic endothelial cell proliferation and/or differentiation. In cultured cells, the overexpression of Spred-1 or Spred-2 strongly suppressed vascular endothelial growth factor-C (VEGF-C)/VEGF receptor (VEGFR)-3-mediated ERK activation, while Spred-1/2-deficient cells were extremely sensitive to VEGFR-3 signaling. These data suggest that Spreds play an important role in lymphatic vessel development by negatively regulating VEGF-C/VEGFR-3 signaling.