VEGF receptor-2 plays a critical role in endothelial cell proliferation during angiogenesis. However, regulation of receptor activity remains incompletely explained. Here, we demonstrate that VEGF stimulates microvascular endothelial cell proliferation in a dose-dependent manner with VEGF-induced proliferation being greatest at 5 and 100 ng/ml and significantly reduced at intermediate concentrations (>50% at 20 ng/ml). Neutralization studies confirmed that signaling occurs via VEGFR-2. In a similar fashion, ERK/MAPK is strongly activated in response to VEGF stimulation as demonstrated by its phosphorylation, but with a decrease in phosphoryation at 20 ng/ml VEGF. Immunoblotting analysis revealed that VEGF did not cause a dose-dependent change in expression of VEGFR-2 but instead resulted in reduced phosphorylation of VEGFR-2 when cells were exposed to 10 and 20 ng/ml of VEGF. VEGFR-2 dephosphorylation was associated with an increase in the protein tyrosine phosphatase, SH-PTP1, and endothelial nitric oxide synthase (eNOS). Immunoprecipitation and selective immunoblotting confirmed the association between VEGFR-2 dephosphorylation and the upregulation of SH-PTP1 and eNOS. Transfection of endothelial cells with antisense oligonucleotide against VEGFR-2 completely abolished VEGF-induced proliferation, whereas anti SH-PTP1 dramatically increased VEGF-induced proliferation by 1 and 5-fold at 10 and 200 ng/ml VEGF, respectively. Suppression of eNOS expression only abolished endothelial cell proliferation at VEGF concentrations above 20 ng/ml. Taken together, these results indicate that activation of VEGFR-2 by VEGF enhances SH-PTP1 activity and eNOS expression, which in turn lead to two diverse events: one is that SH-PTP1 dephosphorylates VEGFR-2 and ERK/MAPK, which weaken VEGF mitogenic activity, and the other is that eNOS increases nitric oxide production which in turn lowers SH-PTP1 activity via S-nitrosylation. © 2005 Elsevier Inc. All rights reserved.