Elucidation of the molecular mechanisms underlying carcinogenesis has benefited tremendously from the identification and characterization of oncogenes and tumor suppressor genes. One new advance in this field is the identification of PTPN11 as the first proto-oncogene that encodes a cytoplasmic tyrosine phosphatase with 2 Src-homology 2 (SH2) domains (Shp2). This tyrosine phosphatase was previously shown to play an essential role in normal hematopoiesis. More recently, somatic missense PTPN11 gain-of-function mutations have been detected in leukemias and rarely in solid tumors, and have been found to induce aberrant hyperactivation of the Ras-Erk pathway. This progress represents another milestone in the leukemia/cancer research field and provides a fresh view on the molecular mechanisms underlying cell transformation.