Ewing sarcoma is characterized by chromosomal translocations fusing the EWS gene with various members of the ETS family of transcription factors, most commonly FLI1. EWS-FLI1 is an aberrant transcription factor driving Ewing sarcoma tumorigenesis by either transcriptionally inducing or repressing specific target genes. Herein, we showed that Sprouty 1 (SPRY1), which is a physiological negative feedback inhibitor downstream of fibroblast growth factor (FGF) receptors (FGFRs) and other RAS-activating receptors, is an EWS-FLI1 repressed gene. EWS-FLI1 knockdown specifically increased the expression of SPRY1, while other Sprouty family members remained unaffected. Analysis of SPRY1 expression in a panel of Ewing sarcoma cells showed that SPRY1 was not expressed in Ewing sarcoma cell lines, suggesting that it could act as a tumor suppressor gene in these cells. In agreement, induction of SPRY1 in three different Ewing sarcoma cell lines functionally impaired proliferation, clonogenic growth and migration. In addition, SPRY1 expression inhibited extracellular signal-related kinase/mitogen-activated protein kinase (MAPK) signaling induced by serum and basic FGF (bFGF). Moreover, treatment of Ewing sarcoma cells with the potent FGFR inhibitor PD-173074 reduced bFGF-induced proliferation, colony formation and in vivo tumor growth in a dose-dependent manner, thus mimicking SPRY1 activity in Ewing sarcoma cells. Although the expression of SPRY1 was low when compared with other tumors, SPRY1 was variably expressed in primary Ewing sarcoma tumors and higher expression levels were significantly associated with improved outcome in a large patient cohort. Taken together, our data indicate that EWS-FLI1-mediated repression of SPRY1 leads to unrestrained bFGF-induced cell proliferation, suggesting that targeting the FGFR/MAPK pathway can constitute a promising therapeutic approach for this devastating disease.