Src homology region 2-containing protein tyrosine phosphatase-2 (SHP-2) is required for full activation of Ras/ERK in many cytokine and growth factor receptor signaling pathways. In contrast, SHP-2 inhibits activation of human NK cells upon recruitment to killer cell Ig-like receptors (KIR). To determine how SHP-2 impacts NK cell activation in KIR-dependent or KIR-independent signaling pathways, we employed knockdown and overexpression strategies in NK-like cell lines and analyzed the consequences on functional responses. In response to stimulation with susceptible target cells, SHP-2-silenced NK cells had elevated cytolytic activity and IFN-gamma production, whereas cells overexpressing wild-type or gain-of-function mutants of SHP-2 exhibited dampened activities. Increased levels of SHP-2 expression over this range significantly suppressed microtubule organizing center polarization and granzyme B release in response to target cells. Interestingly, NK-target cell conjugation was only reduced by overexpressing SHP-2, but not potentiated in SHP-2-silenced cells, indicating that conjugation is not influenced by physiological levels of SHP-2 expression. KIR-dependent inhibition of cytotoxicity was unaffected by significant reductions in SHP-2 levels, presumably because KIR were still capable of recruiting the phosphatase under these limiting conditions. In contrast, the general suppressive effect of SHP-2 on cytotoxicity and cytokine release was much more sensitive to changes in cellular SHP-2 levels. In summary, our studies have identified a new, KIR-independent role for SHP-2 in dampening NK cell activation in response to tumor target cells in a concentration-dependent manner. This suppression of activation impacts microtubule organizing center-based cytoskeletal rearrangement and granule release.