The Ras/Mitogen Activated Protein Kinase (MAPK) plays a critical role in cell signaling downstream of receptor tyrosine kinases. The conserved Sprouty family proteins function as feedback regulators of Ras/MAPK signaling. Loss of function mutations in one family member, SPRED1, cause Legius syndrome, an autosomal dominant human disorder that resembles neurofibromatosis type 1 (NF1). Spred1 functions as a negative regulator of the Ras/MAPK pathway, however, the underlying molecular mechanism is poorly understood. We found Spred1 functioned by reducing Ras-GTP levels; SPRED1 loss-of-function mutations identified in Legius syndrome patients were unable to regulate Ras activity levels. The N-terminal EVH1 domain of Spred1 was found to be crucial for its inhibitory function (point mutants in the EVH1 domain failed to function, and the EVH1 domain alone was sufficient to decrease Ras-GTP levels when localized to the plasma membrane). Thus, we utilized tandem affinity purification of wild-type Spred1 and EVH1 domain mutants found in Legius syndrome to identify novel binding partners of the N-terminus. Analysis of protein complexes by mass spectrometry revealed neurofibromin, the NF1 gene product, as a novel Spred1 interacting protein. Here we show that neurofibromin is a Spred1 binding partner that is necessary for Spred1's inhibitory function. Spred1 requires neurofibromin to down-regulate Ras-GTP levels, and we find that the interaction with Spred1 is required for neurofibromin localization to the plasma membrane. This novel mechanism for neurofibromin regulation leads to a better understanding of the pathophysiology of these two overlapping developmental disorders.