SHP-2 is a ubiquitously expressed Src homology-2-containing cytosolic tyrosine phosphatase that binds to and becomes tyrosine-phosphorylated by the activated platelet-derived growth factor receptor-beta (PDGFR-beta). Removal of the binding site on the receptor, by mutation of Tyr1009 to Phe1009 (denoted Y1009F), led to loss of PDGF-stimulated phosphatase activity in cells expressing the mutated receptor, and these cells failed to form membrane edge ruffles and to migrate toward PDGF. Furthermore, treatment with phosphatase inhibitors phenylarsine oxide (PAO) and orthovanadate led to loss of PDGF-stimulated phosphatase activity and attenuated PDGF-stimulated migration of wild type PDGFR-beta cells. Treatment of wild type PDGFR-beta cells with combinations of PAO or orthovanadate and phosphatidylinositol 3-kinase inhibitors wortmannin or LY294002 resulted in a synergistic inhibition of PDGFR-beta-mediated cell migration. PDGF stimulation of wild type PDGFR-beta cells led to induction of p125 focal adhesion kinase (FAK) activity at low concentrations of the growth factor and a decrease at higher concentrations. In the mutant Y1009F cells and in wild type PDGFR-beta cells treated with PAO and orthovanadate, FAK activity was not increased in response to PDGF. These results suggest that SHP-2 activity is involved in regulation of FAK activity and thereby of cell migration through PDGFR-beta, independently of phosphatidylinositol 3-kinase.