Noonan syndrome is a developmental disorder with dysmorphic facies, short stature, cardiac defects, and skeletal anomalies, which can be caused by missense PTPN11 mutations. PTPN11 encodes Src homology 2 domain-containing tyrosine phosphatase 2 (SHP2 or SHP-2), a protein tyrosine phosphatase that acts in signal transduction downstream to growth factor, hormone, and cytokine receptors. We compared the functional effects of three Noonan syndrome-causative PTPN11 mutations on SHP2's phosphatase activity, interaction with a binding partner, and signal transduction. All SHP2 mutants had significantly increased basal phosphatase activity compared to wild type, but that activity varied significantly between mutants and was further increased after epidermal growth factor stimulation. Cells expressing SHP2 mutants had prolonged extracellular signal-regulated kinase 2 activation, which was ligand-dependent. Binding of SHP2 mutants to Grb2-associated binder-1 was increased and sustained, and tyrosine phosphorylation of both proteins was prolonged. Coexpression of Grb2-associated binder-1-FF, which lacks SHP2 binding motifs, blocked the epidermal growth factor-mediated increase in SHP2's phosphatase activity and resulted in a dramatic reduction of extracellular signal-regulated kinase 2 activation. Taken together, these results document that Noonan syndrome-associated PTPN11 mutations increase SHP2's basal phosphatase activity, with greater activation when residues directly involved in binding at the interface between the N-terminal Src homology 2 and protein tyrosine phosphatase domains are altered. The SHP2 mutants prolonged signal flux through the RAS/mitogen-activated protein kinase (ERK2/MAPK1) pathway in a ligand-dependent manner that required docking through Grb2-associated binder-1 (GAB1), leading to increased cell proliferation.