We study the problem of recovering a high-dimensional sparse signal based on random projections defined by various classes of measurement matrices. While significant work has focused on sparse recovery methods using dense measurement matrices, a number of recent results have investigated the use of sparse measurement matrices. Sparse matrices can reduce computational complexity and storage costs, as well as communication and latency in distributed sensor network applications. However, measurement sparsity can potentially hurt performance by requiring more measurements to recover the signal. Therefore, an important question is to characterize the tradeoff between the sparsity of the measurement matrix and the number of measurements needed to recover. We first address this question in an information-theoretic setting, providing limits on the performance of any recovery method. We then present two computationally efficient recovery methods, and compare their performance in terms of computational complexity and sampling efficiency.