Src homology-2 (SH2) domain-containing phosphatases (Shps) are a small, highly conserved subfamily of protein-tyrosine phosphatases, members of which are present in both vertebrates and invertebrates. The mechanism of regulation of Shps by ligand binding is now well understood. Much is also known about the normal signaling pathways regulated by each Shp and the consequences of Shp deficiency. Recent studies have identified mutations in human Shp2 as the cause of the inherited disorder Noonan syndrome. Shp2 mutations might also contribute to the pathogenesis of some leukemias. In addition, Shp2 might be a key virulence determinant for the important human pathogen Helicobacter pylori. Despite these efforts, however, the key targets of each Shp have remained elusive. Identifying these substrates remains a major challenge for future research.