Sprouty, an essential antagonist of fibroblast growth factor receptor signaling, is induced following fibroblast growth factor receptor activation. The signaling pathways that induce sprouty have been incompletely characterized. However, studies show that MAP kinase signaling stimulates sprouty induction in various cell lines. Here we report that activation of sprouty expression by basic fibroblast growth factor required phospholipase Cgamma (PLCgamma) and calcium-dependent signaling. We showed that the induction of sprouty was inhibited by chelation of intracellular or extracellular calcium and that a fibroblast growth factor receptor deficient for PLCgamma signaling only weakly induced sprouty expression. Additionally, inhibition of PLCgamma with a pharmacological antagonist repressed the induction of sprouty by basic fibroblast growth factor. These findings indicate that calcium-dependent signaling regulates sprouty expression and that PLCgamma is vital for this process. This pathway of sprouty induction may be critical at sites such as limb bud mesenchyme where MAP kinases are inactive.