The Sprouty (Spry) proteins act as inhibitors of the Ras/ERK pathway downstream of receptor tyrosine kinases. In this study, we report a novel interaction between protein kinase C ␦ (PKC␦) and Spry2. Endogenous PKC␦ and Spry2 interact in cells upon basic fibroblast growth factor stimulation, indicating a physiological relevance for the interaction. This interaction appeared to require the full-length Spry2 protein and was conformationdependent. Conformational constraints were released upon FGFR1 activation, allowing the interaction to occur. Although this interaction did not affect the phosphorylation of PKC␦ by another kinase, it reduced the phosphorylation of a PKC␦ substrate, protein kinase D1 (PKD1). Spry2 was found to interact more strongly with PKC␦ with increasing amounts of PKD1, which indicated that instead of competing with PKD1 for binding with PKC␦, it was more likely to form a trimeric complex with both PKC␦ and PKD1. Formation of the complex was found to be dependent on an existing PKC␦-PKD1 interaction. By disrupting the interaction between PKC␦ and PKD1, Spry2 was unable to associate with PKC␦ to form the trimeric complex. As a consequence of this trimeric complex, the existing interaction between PKC␦ and PKD1 was increased, and the transfer of phosphate groups from PKC␦ to PKD1 was at least partly blocked by Spry2. The action of Spry2 on PKC␦ resulted in the inhibition of both ERK phosphorylation and invasion of PC-3 cells via PKC␦ signaling. By disrupting the capacity of PKC␦ to phosphorylate its cognate substrates, Spry2 may serve to modulate PKC␦ signaling downstream of receptor tyrosine kinases and to regulate the physiological outcome.