Polymorphisms of PTPN11 encoding SHP-2 are biomarkers for ulcerative colitis (UC) susceptibility. However, their functional relevance is unknown. We thus investigated the role of epithelial SHP-2 in the control of intestinal homeostasis. Mice with an intestinal epithelial cell-specific SHP-2 deletion (SHP-2(IEC-KO) mice) were generated. Control and SHP-2(IEC-KO) mice were monitored for clinical symptoms and sacrificed for histological staining and Western blot analyses. Cytokines and chemokines, as well as intestinal permeability, were quantified. SHP-2 mRNA expression was evaluated in control and UC patients. SHP-2(IEC-KO) mice showed growth retardation compared to control littermates and rapidly developed severe colitis. Colon architecture was markedly altered with infiltration of immune cells, crypt abscesses, neutrophil accumulation, and reduced goblet cell numbers. Decreased expression of claudins was associated with enhanced intestinal permeability in mutant SHP-2(IEC-KO) mice. Inflammatory transcription factors Stat3 and NF-κB were hyperactivated early in the mutant colonic epithelium. Levels of several epithelial chemokines and cytokines were markedly enhanced in SHP-2(IEC-KO) mice. Of note, antibiotic treatment remarkably impaired the development of colitis in SHP-2(IEC-KO) mice. Finally, SHP-2 mRNA levels were significantly reduced in intestinal biopsy specimens from UC patients. Our results establish intestinal epithelial SHP-2 as a critical determinant for prevention of gut inflammation.