The chemokine-CXCL12 and its receptor, CXCR4, have recently been shown to play an important role in regulating the directional migration of breast cancer cells to sites of metastasis. In the present study, we showed that CXCL12 enhanced the chemotaxis, chemoinvasion and adhesive properties of breast cancer cells; parameters that are critical for development of metastasis. We have also evaluated the signaling mechanisms that regulate CXCL12-induced and CXCR4-mediated breast cancer cell motility and invasion. These studies revealed that CXCL12 induces the tyrosine phosphorylation of focal adhesion kinase (FAK) at residues 397 and 577, and of RAFTK/Pyk2 at residues 402 and 579/580. The cytoskeletal proteins paxillin and Crk, as well as tyrosine phosphatase SHP2 and adaptor protein Cbl, were also phosphorylated. CXCL12 induced the activation of PI 3-kinase, and increased its association with Cbl and SHP2. PI 3-kinase, RAFTK/Pyk2 and tyrosine phosphatase inhibitors significantly blocked CXCL12-induced chemotaxis and chemoinvasion. The role of SHP2 and Cbl in CXCL12-induced chemotaxis and chemoinvasion in breast cancer cells was further defined by transiently overexpressing wild-type SHP2, wild-type Cbl, dominant-negative SHP2, Cbl mutants 70Z/3 and G306E or double transfectants of the Cbl and SHP2 constructs. We found a novel role of Cbl in CXCL12-induced chemotaxis, which may be mediated through the activation and formation of a multimeric complex comprised of Cbl, SHP2 and PI 3-kinase. We also observed the activation of matrix metalloproteinases 2 and 9 upon CXCL12 stimulation. These studies provide new information regarding signaling pathways that may regulate CXCL12-induced metastasis in breast cancer cells.