Src homology 2 domain-containing tyrosine phosphatase-2 (SHP-2) is an important regulator of cell signaling because of its ability to dephosphorylate receptors of growth factors as well as the cytokines and tyrosine-phosphorylated proteins associated with these receptors. In the current study, we used four different prostate cancer cell lines: PC3, DU145, LNCaP and LNCaP-IL6+. Tumor specimens from 122 patients with prostate cancer were analyzed using a tissue microarray. Our data demonstrate that all four prostate cancer cell lines express the SHP-2 protein. Additionally, low staining intensity and SHP-2 expression in the cytoplasm of cancer cells in prostate tumor specimens was inversely correlated with prostate volume (p = 0.041 and p = 0.042, respectively) whereas nuclear staining was positively correlated with extracapsular extension (p = 0.039). In our post-prostatectomy specimens, we found that patients with low SHP-2 expression had less favorable outcomes with respect to biochemical recurrence and clinical progression (p = 0.005 and p = 0.018, respectively). The loss of cytoplasmic SHP-2 expression is associated with increased growth and prostatic cancer progression.