Using transient overexpression and microinjection approaches, we examined SHPTP2's function in growth factor signaling. Overexpression of catalytically inactive SHPTP2 (PTP2CS) but not catalytically inactive SHPTP1, inhibited mitogen-activated protein (MAP) kinase activation and Elk-1 transactivation following epidermal growth factor (EGF) stimulation of 293 cells. An SHPTP2 mutant with both C-terminal tyrosyl phosphorylation sites converted to phenylalanine (PTP2YF) was also without effect; moreover, PTP2YF rescued PTP2CS-induced inhibition of EGF-induced Elk-1 transactivation. PTP2CS did not inhibit transactivation by activated Ras, suggesting that SHPTP2 acts upstream of or parallel to Ras. Neither PTP2CS nor PTP2YF inhibited platelet-derived growth factor (PDGF)-induced Elk-1 transactivation. Thus, protein-tyrosine phosphatase activity, but not tyrosyl phosphorylation of SHPTP2, is required for the immediate-early responses to EGF but not to PDGF. To determine whether SHPTP2 is required later in the cell cycle, we assessed S-phase entry in NIH 3T3 cells microinjected with anti-SHPTP2 antibodies or with a glutathione S-transferase (GST) fusion protein encoding both SH2 domains (GST-SH2). Microinjection of anti-SHPTP2 antibodies prior to stimulation inhibited EGF- but no PDGF- or serum-induced S-phase entry. Anti-SHPTP2 antibodies or GST-SH2 fusion protein could inhibit EGF-induced S-phase entry for up to 8 h after EGF addition. Although MAP kinase activation was detected shortly after EGF stimulation, no MAP kinase activation was detected around the restriction point. Therefore, SHPTP2 is absolutely required for immediate-early and late events induced by some, but not all, growth factors, and the immediate-early and late signal transduction pathways regulated by SHPTP2 are distinguishable.