Src homology region 2 (SH2) domain-containing phosphatase 1 (SHP-1; previously named HCP, PTP1C, SH-PTP1, and SHP) is a cytosolic protein tyrosine phosphatase that contains two SH2 domains. Recent data have demonstrated that the gene encoding SHP-1 is mutated in motheaten (mc) and viable motheaten (mc') mice resulting in autoimmune disease. More recently, SHP-1 has been shown to negatively regulate B cell antigen receptor (BCR)-initiated signaling. To elucidate potential mechanisms of SHP-1 action in BCR signal transduction, we studied proteins that interact with SHP-1 in B cells. Both anti-SHP-1 antibody and the two SH2 domains of SHP-1 expressed as glutathione S-transferase fusion proteins precipitated at least three phosphoproteins of approximately 75, 110, and 150 kD upon anti-immunoglobulin M stimulation of the WEHI-231 immature B cell line. Binding of SHP-1 to the 75- and 110-kD proteins appeared to be mediated mainly by the NH2-terminal SH2 domain of SHP-1, whereas both the NH2- and COOH-terminal SH2 domains are required for maximal binding to the 150-kD protein. Immunoprecipitation and Western blot analysis revealed that the SHP-1-associated 75-kD protein is the hematopoietic cell-specific, SH2-containing protein SLP-76. Further, this protein-protein association was constitutively observed and stable during the early phase of BCR signaling. However, significant tyrosine phosphorylation of SLP-76 as well as of SHP-1 was observed after BCR ligation. Constitutive association of SHP-1 with SLP-76 could also be detected in normal splenic B cells. Collectively, these results suggest possible mechanisms by which SHP-1 may modulate signals delivered by BCR engagement.