SHP-2, a tyrosine phosphatase implicated in diverse signaling pathways induced by growth factors and cytokines, is also involved in DNA damage-triggered signaling and cellular responses. We previously demonstrated that SHP-2 played an important role in DNA damage-induced apoptosis and G2/M cell cycle checkpoint. In the present studies, we have provided evidence that SHP-2 functions in DNA damage apoptosis and G2/M arrest in catalytically dependent and independent manners, respectively. Mutant embryonic fibroblasts with the Exon 3 deletion mutation in SHP-2 showed decreased apoptosis and diminished G2/M arrest in response to cisplatin treatment. Wild type (WT), but not catalytically inactive mutant SHP-2 (SHP-2 C459S), rescued the apoptotic response of the mutant cells. Interestingly, both WT and SHP-2 C459S efficiently restored the G2/M arrest response. Furthermore, inhibition of the catalytic activity of endogenous SHP-2 in WT cells by overexpression of SHP-2 C459S greatly decreased cell death but not G2/M arrest induced by cisplatin. Biochemical analyses revealed that activation of c-Abl kinase was decreased in SHP-2 C459S-overexpressing cells. However, DNA damage-induced translocation of Cdc25C from the nucleus to the cytoplasm was fully restored in both WT and SHP-2 C459S "rescued" cells. Additionally, we demonstrated that the role of SHP-2 in DNA damage-induced cellular responses was independent of the tumor suppressor p53. Embryonic stem cells with the SHP-2 deletion mutation showed markedly decreased sensitivity to cisplatin-induced apoptosis, attributed to impaired induction of p73 but not p53. In agreement with these results, DNA damage-induced apoptosis and G2/M arrest were also decreased in SHP-2/p53 double mutant embryonic fibroblasts. Collectively, these studies have further defined the mechanisms by which SHP-2 phosphatase regulates DNA damage responses.