The haemopoietic-restricted Src homology 2-containing inositol 5'-phosphatase (SHIP) acts as a negative regulator of myeloid cell proliferation, survival and end-cell activation. It does so, at least in part, by hydrolysing the phosphoinositide 3-kinase (PI3K)-generated second messenger, PtdIns(3,4,5) P (3) (PI-3,4,5-P(3)) to PtdIns(3,4) P (2). As a result, the myeloid progenitors in SHIP-knockout mice display enhanced survival and proliferation and the mice have increased numbers of neutrophils and monocytes/macrophages. Interestingly, although SHIP is not required for mast cell or macrophage development, it restrains their differentiation since progenitors from SHIP(-/-) mice differentiate into mature mast cells and macrophages significantly faster than their wild-type counterparts. This could suggest that elevated PI-3,4,5-P(3) levels accelerate myeloid differentiation. In bone-marrow-derived mast cells, SHIP prevents degranulation by IgE alone, restrains IgE-antigen-induced degranulation and limits the production of inflammatory cytokines. On the other hand, in peritoneal macrophages, SHIP is a positive regulator of NO production, since SHIP(-/-) peritoneal macrophages produce 5-10-fold less NO than their wild-type counterparts, even though they show greater lipopolysaccharide/interferon-gamma-induced nuclear factor kappa B activation and more rapid inducible NO synthase (iNOS) generation. This is a result of 10-fold higher levels of arginase I in the SHIP(-/-) macrophages, which redirects the iNOS substrate, L-arginine, from NO to ornithine production. This suggests that the chronically elevated PI-3,4,5-P(3) levels in SHIP(-/-) mice may convert M1 (killing) macrophages, which produce NO to kill micro-organisms and tumour cells, into M2 (healing) macrophages, which produce ornithine to promote host cell growth and fibrosis.