Several lines of evidence have suggested that protein tyrosine phosphatases, including CD45 and SHP-1, regulate macrophage activation. Macrophages from mice lacking SHP-1 (motheaten mice) are hyper-responsive to man), stimuli, suggesting that SHP-1 may negatively regulate macrophage activation. Herein we report that the repressible/inducible over-expression of wild-type SHP-1 in a subclone of RAW 264.7 macrophages (RAW-TT 10 cells) inhibited both TNF secretion and iNOS protein accumulation in response to stimulation with lipopolysaccharide (LPS) and recombinant murine interferon-gamnia and led to diminished LPS-mediated tyrosine phosphorylation of vav1. In contrast, expression of a truncated SHP-1 construct previously shown to interfere with endogenous SHP-1 function modestly augmented LPS-mediated TNF and iNOS production and did not inhibit vav1 tyrosine phosphorylation. Taken together, these data provide the first direct evidence that SHP-1 inhibits macrophage activation by LPS and suggest that this effect may be mediated in part by dephosphorylation of vav1. (c) 2006 Elsevier Inc. All rights reserved.