SHP2, a cytoplasmic protein-tyrosine phosphatase encoded by the PTPN11 gene, plays a critical role in developmental hematopoiesis in the mouse, and gainof- function mutations of SHP2 are associated with hematopoietic malignancies. However, the role of SHP2 in adult hematopoiesis has not been addressed in previous studies. In addition, the role of SHP2 in human hematopoiesis has not been described. These questions are of considerable importance given the interest in development of SHP2 inhibitors for cancer treatment. We used shRNA mediated inhibition of SHP2 expression to investigate the function of SHP2 in growth factor (GF) signaling in normal human CD34 + cells. SHP2 knockdown resulted in markedly reduced proliferation and survival of cells cultured with GF, and reduced colony-forming cell growth. Cells expressing gain-of-function SHP2 mutations demonstrated increased dependency on SHP2 expression for survival compared with cells expressing wildtype SHP2. SHP2 knockdown was associated with significantly reduced myeloid and erythroid differentiation with retention of CD34+ progenitors with enhanced proliferative capacity. Inhibition of SHP2 expression initially enhanced and later inhibited STAT5 phosphorylation and reduced expression of the antiapoptotic genes MCL1 and BCLXL. These results indicate an important role for SHP2 in STAT5 activation and GF-mediated proliferation, survival, and differentiation of human progenitor cells. © 2011 by The American Society of Hematology.