The signaling mechanisms by which neurotrophic receptors regulate neuronal survival and axonal growth are still incompletely understood. In the receptor tyrosine kinase RET, a receptor for GDNF (glial cell line-derived neurotrophic factor), the functions of the majority of tyrosine residues that become phosphorylated are still unknown. Here we have identified the protein-tyrosine phosphatase SHP2 as a novel direct interactor of RET and the first effector known to bind to phosphorylated Tyr 687 in the juxtamembrane region of the receptor. We show that SHP2 is recruited to RET upon ligand binding in a cooperative fashion, such that both interaction with Tyr 687 and association with components of the Tyr 1062 signaling complex are required for stable recruitment of SHP2 to the receptor. SHP2 recruitment contributes to the ability of RET to activate the PI3K/AKT pathway and promote survival and neurite outgrowth in primary neurons. Furthermore, we find that activation of protein kinase A (PKA) by forskolin reduces the recruitment of SHP2 to RET and negatively affects ligand-mediated neurite outgrowth. In agreement with this, mutation of Ser 696 , a known PKA phosphorylation site in RET, enhances SHP2 binding to the receptor and eliminates the effect of forskolin on ligand-induced outgrowth. Together, these findings establish SHP2 as a novel positive regulator of the neurotrophic activities of RET and reveal Tyr 687 as a critical platform for integration of RET and PKA signals. We anticipate that several other phosphotyrosines of unknown function in neuronal receptor tyrosine kinases will also support similar regulatory functions.Neurotrophic factors regulate neuronal survival, morphology, and function and are essential for the development and maintenance of the nervous system. Together with the neurotrophins, glial cell line-derived neurotrophic factor (GDNF) 4 and related family members are among the most important neurotrophic factors in mammals. Because of the potent prosurvival and neuroprotective effects of GDNF on midbrain dopaminergic neurons, much of the initial interest in GDNF was focused on its possible therapeutic effects in Parkinson disease (1, 2). It has more recently been appreciated that GDNF and related factors affect a host of important processes in mature neurons and their precursors and also outside the nervous system. GDNF signals by binding to a receptor complex formed by the ligand-binding subunit GFR␣1 and the signaling subunit RET, a member of the receptor tyrosine kinase (RTK) family (3). GFR␣1 also associates with the neural cell adhesion molecule, NCAM, to mediate the effects of GDNF independently of RET (4 -6). Some of the activities of GDNF can also be mediated by GFR␣1 in the absence of either RET or NCAM, suggesting alternative mechanisms of transmembrane signaling (7,8). A thorough understanding of the molecular mechanisms by which GDNF functions in different contexts will be essential to elucidating its contribution to nervous system development and exploiting its therapeutic poten...