Thanatophoric dysplasia is a member of the achondroplasia family of human skeletal dysplasias, which result from FGFR3 mutations that exaggerate this receptor's inhibitory influence on chondrocyte proliferation and differentiation in the skeletal growth plate. We have previously reported that defective lysosomal degradation of activated receptor contributes to the gain-of-function of the mutant FGFR3. We now provide evidence that this disturbance is mediated by the receptor's kinase activity and involves constitutive induction and activation of Spry2. Our findings suggest that activated Spry2 may interfere with c-Cbl-mediated ubiquitination of FGFR3 by sequestering c-Cbl. They provide novel insight into the pathogenesis of this group of human skeletal dysplasias and identify a mechanism that potentially could be targeted therapeutically.