Src homology 2-containing protein tyrosine phosphatase 2 (SHP-2) is known to protect neurons from neurodegeneration during ischemia/reperfusion injury. We recently reported that ROS-mediated oxidative stress promotes phosphorylation of endogenous SHP-2 in astrocytes and complex formation between caveolin-1 and SHP-2 in response to oxidative stress. To examine the region of SHP-2 participating in complex formation with caveolin-1, we generated three deletion mutant constructs and six point mutation constructs of SHP-2. Compared with wild-type SHP-2, binding of the N-SH2 domain deletion mutant of SHP-2 to p-caveolin-1 was reduced greatly, using flow cytometric competitive binding assays and surface plasmon resonance (SPR). Moreover, deletion of the N-SH2 domain of SHP-2 affected H2O2-mediated ERK phosphorylation and Src phosphorylation at Tyr 419 in primary astrocytes, suggesting that N-SH2 domain of SHP-2 is responsible for the binding of caveolin-1 and contributes to the regulation of Src phosphorylation and activation following ROS-induced oxidative stress in brain astrocytes.