VEGF-induced ERK1/2 activation is mediated by a signaling mechanism involving the sequential activation of PLCgamma-PKC-Raf1-MEK-ERK1/2. This signaling pathway is necessary, but not sufficient for ERK1/2 activation, as VEGF-induced generation of reactive oxygen species (ROS) is also required. The molecular interaction by which VEGF-induced ROS generation is coordinated with the PLCgamma plus PKC-dependent pathway is not certain, and the goal of this study was to clarify this issue. Prior investigations examining ROS-induced signaling have focused on the cellular protein tyrosine phosphatases (PTPs), and we asked whether a PTP participates in ERK1/2 activation in endothelial cells. We show that both the general PTP inhibitor vanadate, and a dominant negative inhibitor of SHP-1, mimics the effects of VEGF in activating ERK1/2. The phosphatase inhibitors induce ERK1/2 activation in endothelial cells lacking VEGF receptors, indicating that the inhibitors target a downstream effector. As is the case after VEGF treatment, the phosphatase inhibitors do lead to the activation of PLCgamma, and a pharmacological inhibitor of the Src kinases blocks this. These results lead to the conclusion that inhibition of a protein tyrosine phosphatase activates endothelial cell ERK1/2 by a signaling mechanism involving the sequential activation of Src-PLCgamma-PKC-Raf1-MEK-ERK1/2. VEGF treatment most likely activates this pathway by inhibiting SHP-1 through a ROS-dependent mechanism.