Abstract SHP2 is a protein tyrosine phosphatase encoded by the PTPN11 gene. SHP2 is normally auto-inhibited by its regulatory N-SH2 domain. It is activated by several receptor tyrosine kinases and positively regulates the RAS/ERK and other signaling pathways by mechanisms that remain incompletely defined. Furthermore, gain-of-function activating SHP2 mutants have been found in human hematologic malignancies and solid tumors, including lung, colon, and prostate cancer. Previous studies have demonstrated the oncogenic activity of gain-of-function SHP2 mutants in the hematopoietic system. To investigate the biological functions of mutant SHP2 in vivo, we generated transgenic mice harboring a tetO-SHP2E76K transgene for tetracycline-inducible expression of the constitutively active SHP2E76K mutant. This allows us to examine the roles of the cancer-associated, Glu-76 mutant SHP2 in various tissues in bitransgenic mice. tetO-SHP2E76K mice were crossed with CCSP-rtTA or SPC-rtTA mice for inducible expression of SHP2E76K in the lung type II pneumocytes. Elevated levels of active Erk1/2 and Src were detected in the lungs of bitransgenic mice induced with doxycycline. Focal hyperplasia of bronchioloalveolar epithelial cells was observed within one month of doxycycline induction in bitransgenic mice, which progressed to more extensive atypical adenomous hyperplasia and adenoma after six months. These results suggest that Shp2 is a proto-oncogene of lung carcinoma. Citation Format: {Authors}. {Abstract title} [abstract]. In: Proceedings of the 103rd Annual Meeting of the American Association for Cancer Research; 2012 Mar 31-Apr 4; Chicago, IL. Philadelphia (PA): AACR; Cancer Res 2012;72(8 Suppl):Abstract nr 4005. doi:1538-7445.AM2012-4005