Src homology 2 domain–containing protein tyrosine phosphatase 1 (SHP-1) has a well-established role in myocardial infarction, yet its involvement in atrial fibrosis and atrial fibrillation (AF) has not been elucidated. As cardiac arrhythmias caused by AF are a major global health concern, we investigated whether SHP-1 modulates AF development. The degree of atrial fibrosis was examined using Masson’s trichrome staining, and SHP-1 expression in the human atrium was assessed using quantitative polymerase chain reaction (qPCR), immunohistochemistry (IHC), and western blotting (WB). We also examined SHP-1 expression in cardiac tissue from an AF mouse model, as well as in angiotensin II (Ang II)-treated mouse atrial myocytes and fibroblasts. We found that SHP-1 expression was reduced with the aggravation of atrial fibrosis in clinical samples of patients with AF. SHP-1 was also downregulated in the heart tissue of AF mice and Ang II-treated myocytes and fibroblasts, compared with that in the control groups. Next, we demonstrated that SHP-1 overexpression alleviated AF severity in mice by injecting a lentiviral vector into the pericardial space. In Ang II-treated myocytes and fibroblasts, we observed excessive extracellular matrix (ECM) deposition, reactive oxygen species (ROS) generation, and transforming growth factor beta 1 (TGF-β1)/mothers against decapentaplegic homolog 2 (SMAD2) pathway activation, all of which were counteracted by the overexpression of SHP-1. Our WB data showed that STAT3 activation was inversely correlated with SHP-1 expression in samples from patients with AF, AF mice, and Ang II-treated cells. Furthermore, administration of colivelin, a STAT3 agonist, in SHP-1-overexpressing, Ang II-treated myocytes and fibroblasts resulted in higher levels of ECM deposition, ROS generation, and TGF-β1/SMAD2 activation. These findings indicate that SHP-1 regulates AF fibrosis progression by modulating STAT3 activation and is thus a potential treatment target for atrial fibrosis and AF.