SHP-1 (PTPN6) is a member of the SHP sub-family of protein tyrosine phosphatases and plays a critical role in the regulation of the JAK/STAT signaling pathway. Previous studies suggested that SHP-1 contains a PTP1B-like second phosphotyrosine pocket that allows for binding of tandem phosphotyrosine residues, such as those found in the activation loop of JAK kinases. To discover the structural nature of the interaction between SHP-1 and the JAK family member, JAK1, we determined the 1.8 angstrom co-crystal structure of the SHP-1 catalytic domain and a JAK1-derived substrate peptide. This structure reveals electron density for only one bound phosphotyrosine residue. To investigate the role of the predicted second site pocket we determined the structures of SHP-1 in complex with phosphate and sulfate to 1.37 angstrom and 1.7 angstrom, respectively, and performed anomalous scattering experiments for a selenate-soaked crystal. These crystallographic data suggest that SHP-1 does not contain a PTP1B-like second site pocket. This conclusion is further supported by analysis of the relative dephosphorylation and binding affinities of mono- and tandem-phosphorylated peptide substrates. The crystal structures instead indicate that SHP-1 contains an extended C-terminal helix alpha 2' incompatible with the predicted second phosphotyrosine binding site. This study suggests that SHP-1 defines a new category of PTP1B-like protein tyrosine phosphatases with a hindered second phosphotyrosine pocket. (c) 2013 Elsevier Inc. All rights reserved.