We showed recently that nicotine activates the growth-promoting enzyme Janus kinase 2 (JAK2) in PC12 cells and that preincubation of these cells with the JAK2-specific inhibitor AG-490 blocked the nicotine-induced neuroprotection against beta-amyloid (1-42) [Abeta (1-42)]. These results provided direct evidence for linkage between JAK2 and the alpha7 nicotinic acetylcholine receptor-induced neuroprotection in PC12 cells. We also showed that preincubation with angiotensin II (Ang II), functioning via the angiotensin II type 2 (AT2) receptor, blocked both the nicotine-induced activation of JAK2 and its neuroprotection against Abeta (1-42). Recently growth-inhibitory effects of the AT2 receptor have been reported to be mediated by the activation of protein tyrosine phosphatases (PTPases) and that AT2 receptor stimulation is associated with a rapid activation of the PTPase SHP-1 (the cytoplasmic tyrosine phosphatase that contains Src homology 2 domains), a negative regulator of JAK2 signaling. Therefore, the potential biological significance of AT2 receptor-induced effects on both the nicotine-induced activation of JAK2 and its neuroprotection against Abeta (1-42) led us to investigate whether SHP-1 activation could be involved in this process. We found that Ang II induced the activation of SHP-1 and that an antisense against SHP-1 not only augmented the nicotine-induced tyrosine phosphorylation of JAK2 but also blocked the Ang II neutralization of the nicotine-induced neuroprotection. These results demonstrate that nicotine-induced tyrosine phosphorylation of JAK2 and neuroprotection against Abeta (1-42) in PC12 cells are blocked by Ang II via AT2 receptor-induced activation of SHP-1.