Medullary thyroid carcinoma (MTC) is a rare tumor originating from thyroid parafollicular C cells, where, in the inherited form, constitutive activation of the RET protooncogene is responsible for unrestrained cell proliferation. We previously demonstrated that somatostatin (SRIF) reduces cell growth in the human MTC cell line TT, which expresses all SRIF receptor (SSTR) subtypes and responds differently to selective SSTR agonists. The antiproliferative mechanism of SRIF and its analogs in MTC is still unclear. Src homology-2-containing protein tyrosine phosphatase-1 (SHP-1), a cytoplasmic protein tyrosine phosphatase (PTP), is activated by somatotropin release-inhibiting factor and reduces mutated RET autophosphorylation in a heterologous system. In this study, we explore the role of PTP activation, in particular of SHP-1, in TT cells, where RET is constitutively activated. In TT cells, SRIF stimulated the PTP activity of SHP-1, which was associated with proliferation inhibition and with reduction in the MAPK pathway activation. Blockade of PTP activity with sodium orthovanadate induced cell proliferation and MAPK phosphorylation and blunted the inhibitory effects of SRIF. Moreover, SHP-1 associates with SSTR2 depending on its activation. By using a MAPK kinase inhibitor, we demonstrated that TT cell growth depends on MAPK pathway activation. Furthermore, in TT cells overexpressing SHP-1, cell proliferation and MAPK signaling were strongly down-regulated, whereas in TT cells transfected with a dominant negative form of SHP-1, cell proliferation and MAPK signaling were markedly induced. Our data demonstrate that SRIF inhibitory effects on TT cell proliferation are mediated, at least in part, by SHP-1, which acts through a MAPK-dependent mechanism.