We present here a computational, rule-based model to study the function of the SH2 domain-containing protein tyrosine phosphatase, Shp2, in intracellular signal transduction. The two SH2 domains of Shp2 differentially regulate the enzymatic activity by a well-characterized mechanism, but they also affect the targeting of Shp2 to signaling receptors in cells. Our kinetic model integrates these potentially competing effects by considering the intra- and intermolecular interactions of the Shp2 SH2 domains and catalytic site as well as the effect of Shp2 phosphorylation. Even for the isolated Shp2/receptor system, which may seem simple by certain standards, we find that the network of possible binding and phosphorylation states is composed of over 1000 members. To our knowledge, this is the first kinetic model to fully consider the modular, multifunctional structure of a signaling protein, and the computational approach should be generally applicable to other complex intermolecular interactions.