Renal cell carcinoma (RCC) is one of the most aggressive urologic cancers, however, the mechanism on supporting RCC carcinogenesis is still not clear. By using gene expression profile analysis and functional clustering, PDZ domain-containing 1 (PDZK1) was revealed to be downregulated in human clear cell renal cell carcinoma (ccRCC) samples, which was also verified in several independent public ccRCC data sets. Using PDZK1 overexpression and knockdown models in ccRCC cell lines, we demonstrated that PDZK1 inhibited cell proliferation, cell cycle G1/S phase transition, cell migration and invasion, indicating a tumor-suppressor role in the development and progression of ccRCC. Our study further demonstrated that PDZK1 inhibited cell proliferation and migration of ccRCC via targeting SHP-1. PDZK1 was further identified to suppress cell proliferation by blocking SHP-1 phosphorylation at Tyr536 via inhibition of the association between SHP-1 and PLCβ3, and then retarding Akt phosphorylation and promoting STAT5 phosphorylation in ccRCC cells. Moreover, the inhibitive effects of PDZK1 on SHP-1 phosphorylation and the tumor growth were verified in vivo by xenograft tumor studies. Accordingly, PDZK1 expression was negatively correlated with SHP-1 activation and phosphorylation, advanced pathologic stage, tumor weight and size, and prognosis of ccRCC patients. These findings have provided first lines of evidences that PDZK1 expression is negatively correlated with SHP-1 activation and poor clinical outcomes in ccRCC. PDZK1 was identified as a novel tumor suppressor in ccRCC by negating SHP-1 activity.