The inositol 5'-phosphatase, SHIP (also referred to as SHIP-1 or SHIPalpha), is expressed in all cells of the hematopoietic lineage. Depending on the cell type being investigated and the state of differentiation, SHIP isoforms of several different molecular masses (170, 160, 145, 135, 125, and 110 kDa) have been seen in immunoblots. However, the function of the individual isoforms and the effect of expressing multiple isoforms simultaneously are not understood. Some of these SHIP isoforms have recently been characterized at the level of primary sequence. In this report, we investigated the function of the recently characterized 135-kDa SHIP isoform (SHIPbeta), which appears to possess the catalytic domain but lacks some of the protein-protein interaction motifs at the C terminus. By reconstituting SHIP-deficient DT40 B cells with either SHIPbeta or the better-characterized p145 SHIPalpha, we addressed the function of SHIPbeta in the complete absence of SHIPalpha. We observed that SHIPbeta had enzymatic activity comparable with SHIPalpha and that SHIPbeta was able to reconstitute F(c)gammaRIIB1-mediated inhibition of B cell receptor-induced signaling events such as calcium flux and Akt and mitogen-activated protein kinase activation. SHIPbeta was readily phosphorylated in response to B cell receptor cross-linking with the inhibitory receptor F(c)gammaRIIB1 and SHIPbeta also interacted with the adapter protein Shc. During these studies we also observed that the SHIPalpha or SHIPbeta interaction with Grb2 is not required for F(c)gammaRIIB1-mediated inhibition of calcium flux. These data suggest that SHIPbeta, which is normally expressed in B cells along with SHIPalpha, functions comparably with SHIPalpha and that these two isoforms are not likely to be antagonistic in their function in vivo.