Several growth factors and cytokines, including EGF, are known to induce tyrosine phosphorylation of Signal Regulatory Proteins (SIRPs). Consistent with the idea that increased phosphorylation activates SIRP function, we overexpressed human SIRPalpha1 in U87MG glioblastoma cells in order to examine how SIRPalpha1 modulates EGFR signaling pathways. Endogenous EGFR proteins are overexpressed in U87MG cells and these cells exhibit survival and motility phenotypes that are influenced by EGFR kinase activity. Overexpression of the SIRPalpha1 cDNA diminished EGF-induced phosphoinositide-3-OH kinase (PI3-K) activation in U87MG cells. Reduced EGF-stimulated activation of PI3-K was mediated by interactions between carboxyl terminus of SIRPalpha1 and the Src homology-2 (SH2)-containing phosphotyrosine phosphatase, SHP2. SIRPalpha1 overexpression also reduced the EGF-induced association between SHP2 and the p85 regulatory subunit of PI3-K. Inhibition of transformation and enhanced apoptosis following gamma-irradiation were observed in SIRPalpha1-overexpressing U87MG cells, and enhanced apoptosis was associated with reduced levels of bcl-xL protein. Furthermore, SIRPalpha1-overexpressing U87MG cells displayed reduced cell migration and cell spreading that was mediated by association between SIRPalpha1 and SHP2. However, SIRPalpha1-overexpressing U87MG clonal derivatives exhibited no differences in cell growth or levels of mitogen-activated protein kinase (MAPK) activation. These data reveal a pathway that negatively regulates EGFR-induced PI3-K activation in glioblastoma cells and involves interactions between SHP2 and tyrosine phosphorylated SIRPalpha1. These results also suggest that negative regulation of PI3-K pathway activation by the SIRP family of transmembrane receptors may diminish EGFR-mediated motility and survival phenotypes that contribute to transformation of glioblastoma cells. Oncogene (2000) 19, 3999 - 4010.