Copyright © by The Rockefeller University PressCell signaling does not occur randomly over the cell surface, but is integrated within cholesterol-enriched membrane domains, termed rafts. By targeting SHP-2 to raft domains or to a non-raft plasma membrane fraction, we studied the functional role of rafts in signaling. Serumdepleted, nonattached cells expressing the raft SHP-2 form, but not non-raft SHP-2, display signaling events resembling those observed after fibronectin attachment, such as 1 integrin clustering, 397 Y-FAK phosphorylation, and ERK activation, and also increases Rho-GTP levels. Expression of C the dominant negative N19Rho abrogates raft-SHP-2–induced signaling, suggesting that Rho activation is a downstream event in SHP-2 signaling. Expression of a catalytic inactive SHP-2 mutant abrogates the adhesion-induced feedback inhibition of Rho activity, suggesting that SHP-2 contributes to adhesion-induced suppression of Rho activity. Because raft recruitment of SHP-2 occurs physiologically after cell attachment, these results provide a mechanism by which SHP-2 may influence cell adhesion and migration by spatially regulating Rho activity.Peer reviewed