Paired immunoglobulin-like receptor B (PIR-B) partially mediates the regeneration-inhibiting effects of the myelin-derived protein Nogo, myelin-associated glycoprotein (MAG), and oligodendrocyte-myelin glycoprotein (OMgp). In this study, we report that inhibition of the PIR-B signaling cascades in neurons enhances axon regeneration in the central nervous system (CNS). Binding of MAG to PIR-B led to the association of PIR-B with tropomyosin receptor kinase (Trk) neurotrophin receptors. Src homology 2-containing protein tyrosine phosphatase (SHP)-1 and SHP-2, which were recruited to PIR-B upon MAG binding, functioned as Trk tyrosine phosphatases. Further, SHP-1 and SHP-2 inhibition reduced MAG-induced dephosphorylation of Trk receptors and abolished the inhibitory effect of MAG on neurite growth. Thus, PIR-B associated with Trk to downregulate basal and neurotrophin-regulated Trk activity through SHP-1/2 in neurons. Moreover, in vivo transfection of small interfering RNA (siRNA) for SHP-1 or SHP-2 induced axonal regeneration after optic nerve injury in mice. Our results thus identify a new molecular target to enhance regeneration of the injured CNS.