Phosphoinositol phosphatases are important regulators of signaling pathways relevant to both diabetes and cancer. A 3'-phosphoinositol phosphatase, phosphatase homologous to tensin (PTEN), is both a tumor suppressor and a negative regulator of insulin action. A 5'-phosphoinositol phosphatase, SH2-containing 5'-inositol phosphatase (SHIP2), regulates insulin signaling and its genetic knockout prevents high-fat diet-induced obesity in mice. SHIP2 also regulates cytoskeleton remodeling and receptor endocytosis. This and the fact that both PTEN and SHIP2 act on the same substrate suggest a potential role for SHIP2 in cancer. Here we report that, in direct contrast to PTEN, SHIP2 protein expression is elevated in a number of breast cancer cell lines. RNA interference-mediated silencing of SHIP2 in MDA-231 cells suppresses epidermal growth factor receptor (EGFR) levels by means of enhanced receptor degradation. Furthermore, endogenous SHIP2 in MDA-231 breast cancer cells supports in vitro cell proliferation, increases cellular sensitivity to drugs targeting the EGFR and supports cancer development and metastasis in nude mice. In addition, significantly high proportions (44%; P = 0.0001) of clinical specimens of breast cancer tissues in comparison with non-cancerous breast tissues contain elevated expression of SHIP2 protein. Taken together, our results demonstrate that SHIP2 is a clinically relevant novel anticancer target that links perturbed metabolism to cancer development.