The steady-state airway epithelium has a low rate of stem cell turnover but can nevertheless mount a rapid proliferative response following injury. This suggests a mechanism to restrain proliferation at steady state. One such mechanism has been identified in skeletal muscle in which pro-proliferative FGFR1 signaling is antagonized by SPRY1 to maintain satellite cell quiescence. Surprisingly, we found that deletion of Fgfr1 or Spry2 in basal cells of the adult mouse trachea caused an increase in steady-state proliferation. We show that in airway basal cells, SPRY2 is post-translationally modified in response to FGFR1 signaling. This allows SPRY2 to inhibit intracellular signaling downstream of other receptor tyrosine kinases and restrain basal cell proliferation. An FGFR1-SPRY2 signaling axis has previously been characterized in cell lines in vitro. We now demonstrate an in vivo biological function of this interaction and thus identify an active signaling mechanism that maintains quiescence in the airway epithelium.