Programmed cell death-1 (PD-1) inhibits T cell responses. This function relies on interaction with SHP-2. PD-1 has one immunoreceptor tyrosine-based inhibitory motif (ITIM) at Y223 and one immunoreceptor tyrosine-based switch motif (ITSM) at Y248. Only ITSM-Y248 is indispensable for PD-1-mediated inhibitory function but how SHP-2 enzymatic activation is mechanistically regulated by one PD-1 phosphotyrosine remains a puzzle. We found that after PD-1 phosphorylation, SHP-2 can bridge phosphorylated ITSM-Y248 residues on two PD-1 molecules via its amino terminal (N)-SH2 and carboxyterminal (C)-SH2 domains forming a PD-1: PD-1 dimer in live cells. The biophysical ability of SHP-2 to interact with two ITSM-pY248 residues was documented by isothermal titration calorimetry. SHP-2 interaction with two ITSM-pY248 phosphopeptides induced robust enzymatic activation. Our results unravel a mechanism of PD-1: SHP-2 interaction that depends only on ITSM-Y248 and explain how a single docking site within the PD-1 cytoplasmic tail can activate SHP-2 and PD-1-mediated inhibitory function.