SHP-1, an SH2 domain-containing protein tyrosine phosphatase, is primarily expressed in hematopoietic cells and behaves as a key regulator controlling intracellular phosphotyrosine levels in lymphocytes. SHP-1 has been proposed as a candidate tumor suppressor gene in lymphoma, leukemia and other cancers, as it functions as an antagonist to the growth-promoting and oncogenic potentials of tyrosine kinase. The decreased levels of SHP-1 protein and SHP-1 mRNA observed in various leukemia and lymphoma cell lines have been attributed to either the methylation of the promoter region of the SHP-1 gene or the post-transcriptional block of SHP-1 protein synthesis. In contrast, SHP-1 protein is normally or over-expressed in some non-lymphocytic cell lines, such as prostate cancer, ovarian cancer and breast cancer cell lines. SHP-1 expression also is decreased in some breast cancer cell lines with negative expression of estrogen receptor as well as some prostate and colorectal cancer cell lines. These data suggest that SHP-1 can play either negative or positive roles in regulating signal transduction pathways. Dysfunction in SHP-1 regulation can cause abnormal cell growth and induce different kinds of cancers. In this paper, we summarize recent studies on the expression and regulation of SHP-1 protein and its pathological function in the development of lymphoma, leukemia and other cancers.