Mutations in SHP-2 phosphatase that cause hyperactivation of its catalytic activity have been identified in human leukemias, particularly juvenile myelomonocytic leukemia, which is characterized by hypersensitivity of myeloid progenitor cells to granulocyte macrophage colony-stimulating factor and interleukin (IL)-3. However, the molecular mechanisms by which gain-of-function (GOF) mutations of SHP-2 induce hematopoietic malignancies are not fully understood. Our previous studies have shown that SHP-2 plays an essential role in IL-3 signal transduction in both catalytic-dependent and -independent manners and that overexpression (5-6-fold) of wild type (WT) SHP-2 attenuates IL-3-mediated hematopoietic cell function through accelerated dephosphorylation of STAT5. These results raised the possibility that SHP-2-associated leukemias are not solely attributed to the increased catalytic activity of GOF mutant SHP-2. GOF mutant SHP-2 must have gained additional capacities. To test this possibility, we investigated effects of a GOF mutation of SHP-2 (SHP-2 E76K) on hematopoietic cell function and IL-3 signal transduction by comparing with those of overexpressed WT SHP-2. Our results showed that SHP-2 E76K mutation caused myeloproliferative disease in mice, while overexpression of WT SHP-2 decreased hematopoietic potential of the transduced cells in recipient animals. The E76K mutation in the N-terminal Src homology 2 domain increased interactions of mutant SHP-2 with Grb2, Gab2, and p85, leading to hyperactivation of IL-3-induced Erk and phosphatidylinositol 3-kinase (PI3K) pathways. In addition, despite the substantial increase in the catalytic activity, dephosphorylation of STAT5 by SHP-2 E76K was dampened. Furthermore, catalytically inactive SHP-2 E76K with an additional C459S mutation retained the capability to increase the interaction with Gab2 and to enhance the activation of the PI3K pathway. Taken together, these studies suggest that in addition to the elevated catalytic activity, fundamental changes in physical and functional interactions between GOF mutant SHP-2 and signaling partners also play an important role in SHP-2-related leukemigenesis.