The PTPN11 (protein-tyrosine phosphatase, non-receptor type 11) gene encodes SHP2, a cytoplasmic PTP that is essential for vertebrate development. Mutations in PTPN11 are associated with Noonan and LEOPARD syndrome. Human patients with these autosomal dominant disorders display various symptoms, including short stature, craniofacial defects and heart abnormalities. We have used the zebrafish as a model to investigate the role of Shp2 in embryonic development. The zebrafish genome encodes two ptpn11 genes, ptpn11a and ptpn11b. Here, we report that ptpn11a is expressed constitutively and ptpn11b expression is strongly upregulated during development. In addition, the products of both ptpn11 genes, Shp2a and Shp2b, are functional. Target-selected inactivation of ptpn11a and ptpn11b revealed that double homozygous mutants are embryonic lethal at 5–6 days post fertilization (dpf). Ptpn11a-/-ptpn11b-/- embryos showed pleiotropic defects from 4 dpf onwards, including reduced body axis extension and craniofacial defects, which was accompanied by low levels of phosphorylated Erk at 5 dpf. Interestingly, defects in homozygous ptpn11a-/- mutants overlapped with defects in the double mutants albeit they were milder, whereas ptpn11b-/- single mutants did not show detectable developmental defects and were viable and fertile. Ptpn11a-/-ptpn11b-/- mutants were rescued by expression of exogenous ptpn11a and ptpn11b alike, indicating functional redundance of Shp2a and Shp2b. The ptpn11 mutants provide a good basis for further unravelling of the function of Shp2 in vertebrate development.