AS (Apert syndrome) is a congenital disease composed of skeletal, visceral and neural abnormalities, caused by dominant-acting mutations in FGFR2 [FGF (fibroblast growth factor) receptor 2]. Multiple FGFR2 splice variants are generated through alternative splicing, including PTC (premature termination codon)-containing transcripts that are normally eliminated via the NMD (nonsense-mediated decay) pathway. We have discovered that a soluble truncated FGFR2 molecule encoded by a PTC-containing transcript is up-regulated and persists in tissues of an AS mouse model. We have termed this IIIa–TM as it arises from aberrant splicing of FGFR2 exon 7 (IIIa) into exon 10 [TM (transmembrane domain)]. IIIa–TM is glycosylated and can modulate the binding of FGF1 to FGFR2 molecules in BIAcore-binding assays. We also show that IIIa–TM can negatively regulate FGF signalling in vitro and in vivo. AS phenotypes are thought to result from gain-of-FGFR2 signalling, but our findings suggest that IIIa–TM can contribute to these through a loss-of-FGFR2 function mechanism. Moreover, our findings raise the interesting possibility that FGFR2 signalling may be a regulator of the NMD pathway.