The aim of this study was to investigate the regulation of 5-aza-CdR on transcription of SHP-1 gene and effects on the proliferation and apoptosis of K562 cells. Methylation-specific PCR (MSP) was used to detect CpG island methylation in SHP-1 promoter. MTT and flow cytometry were used to detect the growth and apoptosis of K562 cells after treatment with different concentration of 5-aza-CdR. The expressions of SHP-1 mRNA and protein were determined by FQ-PCR and Western blot. The expression of p-JAK2 was assayed by Western blot. The result showed that methylation of SHP-1 gene promoter was detected in K562 cells, and the SHP-1 mRNA and protein were expressed again in K562 cells after treatment with 5-aza-CdR, meanwhile the expression of phosphorylated P-JAK2 was down-regulated; 5-aza-CdR significantly inhibited the cell growth in dose and time dependent manners. AG490 inhibited the cell proliferation. 5-aza-CdR increased the apoptosis rate of K562 cells also in dose- and time-dependent manners. The apoptosis rates of K562 cells treated with 5-aza-CdR for 1, 3 and 5 days were 9.3%, 24.2% and 37.7% respectively. After treatment with 2 micromol/L 5-aza-CdR for 24 hours, cells in G(0)/G(1) phase increased gradually, cells in G(2)/M phase decreased gradually, cells were arrested in G(0)/G(1) phase. The cell ratios in G(2)/M phase at 1, 3 and 5 days after treatment with 5-aza-CdR were 30.7%, 23.45 and 19.3% respectively. It is concluded that the 5-aza-CdR, inhibitor of specific methylation transferase, can re-express the silent SHP-1 gene in K562 cells, inhibits the proliferation of leukemia cells and induces cell apoptosis by activating JAK/STAT pathway.