Angiotensin II (Ang II) has two major receptor isoforms, AT1 and AT2. AT1 transphosphorylates Ca2+. sensitive tyrosine kinase Pyk2 to activate c-Jun NH2-terminal kinase (JNK), Although AT2 inactivates extracellular signal-regulated kinase (ERK) via tyrosine phosphatases (PTP), the action of AT2 on Pyk2 and JNK remains undefined. Using,AT2-overexpressing: vascular smooth muscle cells (AT2-VSMC) from AT2-transgenic mice, we studied these undefined actions of AT2, AT1-mediated JNK activity was increased 2.2-fold by AT2 inhibition, which was abolished blv orthovanadate. AT2 did not affect AT1-mediated Pyk2 phosphorylation, but attenuated e-Jun mRNA accumulation by 32%. The activity of src-homology 2 domain-containing PTP (SHP-1) was significantly upregulated 1 min after AT2 stimulation. Stable overexpression of SHP-1 dominant negative mutant in AT2-VSMC completely abolished AT2-mediated inhibition of JNK activation and c-Jun expression. These findings suggest that AT2 inhibits JNK activity by affecting the downstream signal of Pyk2 in a SHP-1-dependent manner, leading to a decrease in c-Jun expression.