Helicobacter pylori CagA protein is associated with severe gastritis and gastric carcinoma. CagA is injected from the attached Helicobacter pylori into host cells and undergoes tyrosine phosphorylation. Wild-type but not phosphorylation-resistant CagA induced a growth factor-like response in gastric epithelial cells. Furthermore, CagA formed a physical complex with the SRC homology 2 domain (SH2)-containing tyrosine phosphatase SHP-2 in a phosphorylation-dependent manner and stimulated the phosphatase activity. Disruption of the CagA-SHP-2 complex abolished the CagA-dependent cellular response. Conversely, the CagA effect on cells was reproduced by constitutively active SHP-2. Thus, upon translocation, CagA perturbs cellular functions by deregulating SHP-2.