Helicobacter pylori (H. pylori) plays a crucial role in the development of gastric atrophy and cancer, and cagA‐positive strains, which are universal in Japan, increase the risk of these outcomes substantially. The CagA protein is injected from attached H. pylori into gastric epithelial cells and undergoes Src‐dependent tyrosine phosphorylation and activation of the eukaryotic phosphatase SHP‐2. The CagA/SHP‐2 interactions elicit cellular changes that increase the risk of carcinogenesis. We investigated the association of a frequent single nucleotide polymorphism (SNP; JST057927; G‐to‐A) in the PTPN11 gene that encodes SHP‐2 with gastric atrophy and gastric cancer in Japan. Gastric atrophy was assessed by measuring serum pepsinogen I and II levels. The subjects comprised 454 healthy controls (126 males; mean age, 58.4) and 202 gastric cancer cases (134 males and 68 females; mean age, 66.7). All gastric cancer cases and 250 (55%) controls were H. pylori seropositive; 179 (89%) of the gastric cancer cases had gastric atrophy compared to 137 (55%) of the H. pylori seropositive controls (p < 0.001). Among HP seropositive controls compared to the common PTPN11 G/G genotype, the odds ratio of atrophy was nonsignificantly reduced with the G/A genotype (0.70; 95% CI = 0.39–1.25) and significantly reduced with the A/A genotype (0.09; 95% CI = 0.01–0.72). Lower risk for gastric atrophy had a gene‐dose association with the A allele (p = 0.01, trend test). There was a clear deficiency of the A/A genotype in those with atrophy compared to those without (1 subject in the gastric atrophy group vs. 8 in the group without). Cancer cases differed from controls in frequencies of PTPN11 G/A genotype only because of a higher prevalence of atrophy among the cancer cases. The G/A SNP in the PTPN11 gene appears to be a risk factor for gastric atrophy in subjects infected with cagA‐positive H. pylori. This may explain why only a proportion of CagA‐positive individuals develop gastric atrophy and gastric cancer, even though infection with cagA strains is universal in Asian countries such as Japan. The functional consequences of the G/A polymorphism remain to be elucidated. © 2005 Wiley‐Liss, Inc.