Platelet/endothelial cell adhesion molecule-1 (PECAM-1) is a homophilic adhesion receptor that mediates leukocyte/endothelial cell interactions that take place during transendothelial migration. Recent reports have shown that the binding of certain anti-PECAM-1 antibodies results in up-regulation of integrin function on the surface of leukocytes and platelets, suggesting that PECAM-1 may be capable of transmitting information into the cell following its engagement. PECAM-1 isolated from resting or activated but nonaggregated platelets was phosphorylated predominantly on serine residues; however, PECAM-1 derived from activated, aggregated platelets was strongly phosphorylated on tyrosine. Synthetic tyrosine-phosphorylated peptides derived from five different regions within the cytoplasmic domain of PECAM-1 were screened for their ability to associate with cytoplasmic signaling molecules. The protein-tyrosine phosphatase SHP-2 was found to interact specifically with two different PECAM-1 phosphopeptides containing highly conserved phosphatase-binding motifs on PECAM-1 with the sequences VQpY663TEV and TVpY686SEV. More important, SHP-2 bound not only PECAM-1 phosphopeptides, but also became associated with full-length cellular PECAM-1 during the platelet aggregation process, and this interaction was mediated by the amino-terminal Src homology 2 domains of the phosphatase. Since SHP-2 normally serves as a positive regulator of signal transduction, its association with activated PECAM-1 suggests a number of potential mechanisms by which PECAM-1 engagement might be coupled to integrin activation in vascular cells.