We report here that interleukin-3 (IL-3) and erythropoietin (EPO) induce formation of a complex composed of two SH2-containing phosphatases, the tyrosine phosphatase SHP-2 and the SH2 containing inositol 5-phosphatase (SHIP). Both SHP-2 and SHIP are known to be involved in growth factor signal transduction, but their potential interaction in the same pathway is novel. SHIP has previously been shown to associate with SHC, and potentially to be involved in regulating apoptosis. In contrast, in some model systems, SHP-2 has been demonstrated to positively regulate cell growth. Both phosphatases in the complex were tyrosine phosphorylated, and the amount of SHIP coprecipitating with SHP-2 was inversely related to the amount of SHIP coprecipitating with SHC. In hematopoietic cells transformed by the BCR/ABL oncogene, this phosphatase complex was found to be constitutively present with both components heavily tyrosine phosphorylated. Also, other proteins were detected in the complex, including BCR/ABL itself and c-CBL. However, transformation by BCR/ABL was associated with a reduced SHIP protein expression, which could further affect the accumulation of various inositol polyphosphates in these leukemic cells. These data suggest that the function of SHIP and SHP-2 in normal cells are linked and that BCR/ABL alters the function of this signaling complex.