The critical role for the SH2 domain-containing SHP-1 tyrosine phosphatase in regulating haemopoietic cell behaviour was initially revealed by data linking SHP-1 deficiency to the systemic autoimmunity and severe inflammation exhibited by motheaten mice. This discovery laid the groundwork for the identification of SHP-1 as an inhibitor of activation-promoting signalling cascades and for the coincident demonstration that protein tyrosine phosphatases (PTPs) such as SHP-1 show considerable specificity with respect to the mechanisms whereby they modulate the biochemical and biological sequelae of extracellular simulation. As outlined in this review, SHP-1 has now been implicated in the regulation of a myriad of signalling cascades and cell functions. As a result, the cumulative data generated from studies of this PTP have elucidated not only the functional relevance of SHP-1, but also a number of novel paradigms as to the molecular mechanisms whereby signalling cascades are regulated so as to either augment or abrogate specific cell behaviours.