SHIP2 belongs to the inositol 5-phosphatase family and is characterized by a phosphatidylinositol 3,4,5-trisphosphate (PI(3,4,5)P-3) 5-phosphatase activity. Evidence based on mice lacking the SHIP2 gene has demonstrated its predominant role in the control of insulin sensitivity. However, SHIP2 expression in both hematopoietic and non-hematopoietic cells suggests additional functions. SHIP2 was previously identified in chronic myelogenous progenitor cells, in which its constitutive tyrosine phosphorylation was reported by Wisniewski et al., [Blood 93 (1999) 2707-2720]. Here, we further investigated the function of SHIP2 in this hematopoietic and malignant context. A detailed analysis of the substrate specificity of SHIP2 indicated that this phosphatase is primarily directed towards PI(3,4,5)P-3 both in vitro and in K562 chronic myeloid leukemia cells. The SHIP2-mediated decrease in PI(3,4,5)P-3 levels and increase in phosphatidylinositol 3,4-bisphosphate (PI(3,4)P-3) was accompanied by a reduction of cell proliferation, characterized by an accumulation of the cells in the G2/M phase of the cell cycle. Thus, in addition to its role in the control of insulin sensitivity, SHIP2 may also play a role in cell proliferation, at least in chronic myelogenous progenitor cells. (C) 2002 Elsevier Science (USA). All rights reserved.