Activating mutants of Shp2 protein tyrosine phosphatase, encoded by the PTPN11 gene, are linked to leukemia. In solid tumors, however, PTPN11 mutations occur at low frequencies while the wildtype Shp2 is activated by protein tyrosine kinases (PTKs) in cancer cells and mediates PTK signaling. Therefore, it is important to address whether the wildtype Shp2 plays a functional role critical for tumor growth. Using shRNAs and a PTP-inactive mutant to inhibit Shp2, we find here that tumor growth of DU145 prostate cancer and H292 lung cancer cells depends on Shp2. Suppression of Shp2 inhibited cell proliferation, decreased c-Myc and increased p27 expression in cell cultures. In H292 tumor tissues, c-Myc-positive cells coincided with Ki67-positive cells and smaller tumors from Shp2 knockdown cells had less c-Myc-positive cells and more nuclear p27. Shp2-regulated c-Myc expression was mediated by Src and Erk1/2. Down-regulation of c-Myc reduced cell proliferation while up-regulation of c-Myc in Shp2 knockdown H292 cells partially rescued the inhibitory effect of Shp2 suppression on cell proliferation. Tyrosine phosphoproteomic analysis of H292 tumor tissues showed that Shp2 could both up- and down-regulate tyrosine phosphorylation on cellular proteins. Among other changes, Shp2 inhibition increased phosphorylation of Src Tyr-530 and Cdk1 Thr-14/Tyr-15 and decreased phosphorylation of Erk1 and Erk2 activating sites in the tumors. Significantly, we found that Shp2 positively regulated Gab1 Tyr-627/Tyr-659 phosphorylation. This finding reveals that Shp2 can auto-regulate its own activating signal. Shp2 Tyr-62/Tyr-63 phosphorylation was observed in tumor tissues, indicating that Shp2 is activated in the tumors.