Germline mutations in the Ret protooncogene give rise to the inherited endocrine cancer syndromes MEN types 2A and 2B and familiar medullary thyroid carcinoma. Although it is well accepted that the constitutive active tyrosine kinase of Ret oncogenes ultimately leads to malignant transformation, it is not clear whether a decrease in the autophosphorylation of oncogenic Ret forms can affect the mitogenic and transforming activities of Ret. Potential modulators of the tyrosine kinase activity of Ret could be tyrosine phosphatases that are expressed in human thyroid tissue. Therefore, we investigated the impact of the tyrosine phosphatases SHP1 and SHP2 on the intrinsic tyrosine kinase activity and oncogenic potency of Ret with a 9-bp duplication in the cysteine-rich domain (codons 634-636), which was described in a patient with MEN type 2A recently. SHP1 and SHP2 were stably overexpressed in NIH3T3 fibroblasts together with Ret-9bp. Coexpression of SHP1 with Ret-9bp reduced the autophosphorylation of Ret-9bp by 19 +/- 7% (P = 0.01, n = 4), whereas no effect was seen with SHP2. Furthermore, Ret-9bp could be coimmunoprecipitated with SHP1 but not with SHP2 antibodies. Suppression of the Ret-9bp tyrosine kinase activity by SHP1 caused a decrease in activation of Erk2 (extracellular signal-regulated kinase) and abolished PKB/Akt (protein kinase B) phosphorylation. In addition, diminished Ret-9bp autophosphorylation led to reduced phosphorylation of the transcription factor jun-D. Finally, the inhibitory effect on Ret-9bp signaling resulted in a 40-60% reduction of [(3)H]thymidine incorporation and in reduced ability of NIH3T3 cells to form colonies in soft agar. In conclusion, the data suggest that SHP1 caused a moderate reduction of Ret autophosphorylation, which led to a strong suppression of the Ret oncogene activity.