Inhibitory receptors on hemopoietic cells critically regulate cellular function. Despite their expression on a variety of cell types, these inhibitory receptors signal through a common mechanism involving tyrosine phosphorylation of the immunoreceptor tyrosine-based inhibitory motif (ITIM), which engages Src homology 2 (SH2) domain-containing cytoplasmic tyrosine or inositol phosphatases. In this study, we have investigated the proximal signal-transduction pathway of an ITIM-bearing receptor, gp49B, a member of a newly described family of murine NK and mast cell receptors. We demonstrate that the tyrosine residues within the ITIMs are phosphorylated and serve for the association and activation of the cytoplasmic tyrosine phosphatase SHP-1. Furthermore, we demonstrate a physiologic association between gp49B and SHP-1 by coimmunoprecipitation studies from NK cells. To address the mechanism of binding between gp49B and SHP-1, binding studies involving glutathione S-transferase SHP-1 mutants were performed. Utilizing the tandem SH2 domains of SHP-1, we show that either SH2 domain can interact with phosphorylated gp49B. Full-length SHP-1, with an inactivated amino SH2 domain, also retained gp49B binding. However, binding to gp49B was disrupted by inactivation of the carboxyl SH2 domain of full-length SHP-1, suggesting that in the presence of the phosphatase domain, the carboxyl SH2 domain is required for the recruitment of phosphorylated gp49B. Thus, gp49B signaling involves SHP-1, and this association is dependent on tyrosine phosphorylation of the gp49B ITIMs, and an intact SHP-1 carboxyl SH2 domain.