Germline and somatic gain-of-function mutations in tyrosine phosphatase PTPN11 (SHP-2) are associated with juvenile myelomonocytic leukemia (JMML), a myeloproliferative disease (MPD) of early childhood. The mechanism by which PTPN11 mutations induce this disease is not fully understood. Signaling partners that mediate the pathogenic effects of PTPN11 mutations have not been explored. Here we report that germ line mutation Ptpn11(D61G) in mice aberrantly accelerates hematopoietic stem cell (HSC) cycling, increases the stem cell pool, and elevates short-term and long-term repopulating capabilities, leading to the development of MPD. MPD is reproduced in primary and secondary recipient mice transplanted with Ptpn11(D61G/+) whole bone marrow cells or purified Lineage(-)Sca-1(+)c-Kit(+) cells, but not lineage committed progenitors. The deleterious effects of Ptpn11(D61G) mutation on HSCs are attributable to enhancing cytokine/growth factor signaling. The aberrant HSC activities caused by Ptpn11(D61G) mutation are largely corrected by deletion of Gab2, a prominent interacting protein and target of Shp-2 in cell signaling. As a result, MPD phenotypes are markedly ameliorated in Ptpn11(D61G/+)/Gab2(-/-) double mutant mice. Collectively, our data suggest that oncogenic Ptpn11 induces MPD by aberrant activation of HSCs. This study also identifies Gab2 as an important mediator for the pathogenic effects of Ptpn11 mutations.