Abnormal signalling events mediated by receptor tyrosine kinases (RTKs) contribute to human carcinogenesis. Sprouty2 (Spry2) is a key antagonistic regulator of RTK signalling and suppression of its expression or function may facilitate proliferation and angiogenesis. Using prostate cancer (CaP) as a model, we investigated the significance of Spry2 in human malignancy. We observed downregulated Spry2 expression in invasive CaP cell lines and high-grade clinical CaP (compared to benign prostatic hyperplasia (BPH) and well-differentiated tumours, P= 0.041). A large CpG island is associated with hSPRY2, and extensive hypermethylation of this CpG island was observed in 76–82% of high-grade CaP, while control BPH tissues were predominantly unmethylated (P= 0.0005). Furthermore, suppressed Spry2 expression correlated with methylation of the CpG region in clinical samples (P= 0.004) and treatment with 5-aza-2′-deoxycytidine reactivated Spry2 expression in LNCaP and PC-3M cells. hSPRY2 maps to the long arm of chromosome 13 (13q31. 1), where loss of heterozygosity (LOH) has been reported. We found no evidence of mutation; however, we demonstrated 27–40% LOH using flanking markers to hSPRY2. Hence, while biallelic epigenetic inactivation of hSPRY2 represents the main genetic event in prostate carcinogenesis, the observed 27–40% LOH presents evidence of hemizygous deletion with the remaining allele hypermethylated. We therefore propose hSPRY2 as a potential tumour suppressor locus in CaP.