The protein-tyrosine phosphatase SHP-1 binds to and dephosphorylates the epidermal growth factor receptor (EGFR), and both SH2 domains of SHP-1 are important for this interaction (Tenev, T., Keilhack, H., Tomic, S., Stoyanov, B., Stein-Gerlach, M., Lammers, R., Krivtsov, A. V., Ullrich, A., and Böhmer, F. D. (1997) J. Biol. Chem. 272, 5966-5973). We mapped the EGFR phosphotyrosine 1173 as the major binding site for SHP-1 by a combination of phosphopeptide activation, phosphopeptide competition, and receptor YF mutant analysis. Mutational conversion of the EGFR sequence 1171-1176 AEYLRV into the high affinity SHP-1 binding sequence LEYLYL of the erythropoietin receptor (EpoR) led to a highly elevated SHP-1 binding to the mutant EGFR (EGFR1171-1176EpoR) and in turn to an enhanced dephosphorylation of the receptor. SHP-1 expression interfered with EGF-dependent mitogen-activated protein kinase stimulation, and this effect was more pronounced in case of EGFR1171-1176EpoR. Reduced SHP-1 binding to the EGFR Y1173F mutant resulted in a reduced receptor dephosphorylation by coexpressed SHP-1 and less interference with EGF-dependent mitogen-activated protein kinase stimulation. The effects of receptor mutations on SHP-1 binding were, however, stronger than those on receptor dephosphorylation by SHP-1. Therefore, receptor dephosphorylation may be the result of the combined activity of receptor-bound SHP-1 and SHP-1 bound to an auxiliary docking protein.