Using transient overexpression and microinjection approaches, we examined SHPTP2's function in growth factor signaling. Overexpression of catalytically inactive SHPTP2 (PTP2CS) but not catalytically inactive SHPTP1, inhibited mitogen-activated protein (MAP) kinase activation and Elk-1 transactivation following epidermal growth factor (EGF) stimulation of 293 cells. An SHPTP2 mutant with both C-terminal tyrosyl phosphorylation sites converted to phenylalanine (PTP2YF) was also without effect; moreover, PTP2YF rescued PTP2CS-induced inhibition of EGF-induced Elk-1 transactivation. PTP2CS did not inhibit transactivation by activated Ras, suggesting that SHPTP2 acts upstream of or parallel to Ras. Neither PTP2CS nor PTP2YF inhibited platelet-derived growth factor (PDGF)-induced Elk-1 transactivation. Thus, protein-tyrosine phosphatase activity, but not tyrosyl phosphorylation of SHPTP2, is required for the immediate-early responses to EGF but not to PDGF. To determine whether SHPTP2 is required later in the cell cycle, we assessed S-phase entry in NIH 3T3 cells microinjected with anti-SHPTP2 antibodies or with a glutathione S-transferase (GST) fusion protein encoding both SH2 domains (GST-SH2). Microinjection of anti-SHPTP2 antibodies prior to stimulation inhibited EGF-but not PDGF-or serum-induced S-phase entry. Anti-SHPTP2 antibodies or GST-SH2 fusion protein could inhibit EGF-induced S-phase entry for up to 8 h after EGF addition. Although MAP kinase activation was detected shortly after EGF stimulation, no MAP kinase activation was detected around the restriction point. Therefore, SHPTP2 is absolutely required for immediateearly and late events induced by some, but not all, growth factors, and the immediate-early and late signal transduction pathways regulated by SHPTP2 are distinguishable.