The homeodomain protein HoxA10 interacts with negative cis elements to repress gene transcription in undifferentiated myeloid cells. The CYBB and NCF2 genes, which encode the gp91(PHOX) and p67(PHOX) proteins, are two such HoxA10 target genes. During interferon gamma-induced myeloid differentiation, tyrosine phosphorylation decreases HoxA10 DNA binding affinity and transcriptional repression. Therefore, decreased HoxA10 repression contributes to increased CYBB and NCF2 transcription in differentiating myeloid cells. The current studies investigate modulation of HoxA10 repression activity during myelopoiesis. We determine that phosphorylation of tyrosine residues in the conserved homeodomain decreases HoxA10-DNA binding. We also determine that interaction of the homeodomain phosphotyrosine residues with an adjacent domain in the HoxA10 protein is necessary for decreased DNA binding affinity. Since SHP1 protein-tyrosine phosphatase antagonizes myeloid differentiation and decreases CYBB and NCF2 transcription, we investigated the influence of SHP1-protein-tyrosine phosphatase (PTP) on HoxA10 tyrosine phosphorylation. We find that SHP1-PTP activity increases HoxA10 target gene repression in undifferentiated myeloid cells. Consistent with this, SHP1-PTP interacts with HoxA10 and decreases homeodomain-tyrosine phosphorylation. These investigations suggest that SHP1-PTP activity, in undifferentiated myeloid cells, influences HoxA10 repression of myeloid-specific genes. Therefore, increased HoxA10 repression of myeloid gene transcription is a molecular mechanism for SHP1 inhibition of myeloid differentiation.