Systemic lupus erythematosus (SLE) is a devastating multisystemic autoimmune disorder. However, the molecular mechanisms underlying its pathogenesis remain elusive. Some patients with Noonan syndrome, a congenital disorder predominantly caused by gain-of-function mutations in the protein tyrosine phosphatase SH2 domain-containing PTP (SHP2), have been shown to develop SLE, suggesting a functional correlation between phosphatase activity and systemic autoimmunity. To test this directly, we measured SHP2 activity in spleen lysates isolated from lupus-prone MRL/lpr mice and found it was markedly increased compared with that in control mice. Similar increases in SHP2 activity were seen in peripheral blood mononuclear cells isolated from lupus patients relative to healthy patients. To determine whether SHP2 alters autoimmunity and related immunopathology, we treated MRL/lpr mice with an SHP2 inhibitor and found increased life span, suppressed crescentic glomerulonephritis, reduced spleen size, and diminished skin lesions. SHP2 inhibition also reduced numbers of double-negative T cells, normalized ERK/MAPK signaling, and decreased production of IFN-γ and IL-17A/F, 2 cytokines involved in SLE-associated organ damage. Moreover, in cultured human lupus T cells, SHP2 inhibition reduced proliferation and decreased production of IFN-γ and IL-17A/F, further implicating SHP2 in lupus-associated immunopathology. Taken together, these data identify SHP2 as a critical regulator of SLE pathogenesis and suggest targeting of its activity as a potent treatment for lupus patients.