HiB5 is a multipotent hippocampal stem cell line whose differentiation into cells of a neuronal phenotype is promoted by neurotrophic factors such as PDGF and brain-derived neurotrophicfactor (BDNF). We examined the potential role of Src homology 2 (SH2)-containing protein tyrosine phosphatase (Shp2) in this differentiation process. We found that Shp2 became tyrosine phosphoulated following PDGF treatment. Wild-type Shp2 enhanced the expression of neurofilament, synapsin I and PSD95 by PDGF and BDNF, whereas their expression was attenuated by the catalytically inactive mutants Shp2C/S and Shp2${Delta}$P. Formation of dendritic spine-like structures increased with wild-type Shp2, but diminished with Shp2C/S and Shp2${Delta}$P. PSD95, localized in the post-synaptic density region of dendritic spines, PDGFR${eta}$ and TrkB were co-immunoprecipitated with Shp2 antibodies. These results suggest that Shp2 plays a positive role in mediating PDGF- and BDNF-activated signaling which promotes the formation of dendritic spines.