Environmental factors, including dietary fats, are implicated in colonic carcinogenesis. Dietary fats modulate secondary bile acids including deoxycholic acid (DCA) concentrations in the colon, which are thought to contribute to the nutritional-related component of colon cancer risk. Here we demonstrate, for the first time, that DCA differentially regulated the site-specific phosphorylation of focal adhesion kinase (FAK). DCA decreased adhesion of HCA-7 cells to the substratum and induced dephosphorylation of FAK at tyrosine-576/577 (Tyr-576/577) and Tyr-925. Tyrosine phosphorylation of FAK at Tyr-397 remained unaffected by DCA stimulation. Interestingly, we found that c-Src was constitutively associated with FAK and DCA actually activated Src, despite no change in FAK-397 and an inhibition of FAK-576 phosphorylation. DCA concomitantly and significantly increased association of tyrosine phosphatase ShP2 with FAK. Incubation of immunoprecipitated FAK, in vitro, with glutathione-S-transferase-ShP2 fusion protein resulted in tyrosine dephosphorylation of FAK in a concentration-dependent manner. Antisense oligodeoxynucleotides directed against ShP2 decreased ShP2 protein levels and attenuated DCA-induced FAK dephosphorylation. Inhibition of FAK by adenoviral-mediated overexpression of FAK-related nonkinase and gene silencing of Shp2 both abolished DCA's effect on cell adhesion, thus providing a possible mechanism for inside-out signaling by DCA in colon cancer cells. Our results suggest that DCA differentially regulates focal adhesion complexes and that tyrosine phosphatase ShP2 has a role in DCA signaling.