The SHP-1 phosphatase associates with the receptors for erythropoietin, stem cell factor, and interleukin-3, and negatively regulates the mitogenic signals generated during engagement by their respective ligands. The erythroid progenitors of patients with polycythemia vera are hypersensitive to the mitogenic effects of these growth factors despite the fact that the numbers and binding affinities for their receptors are not increased. To determine whether post-receptor signaling defects may account for growth factor-hypersensitivity in polycythemia vera, we determined the expression of SHP-1 in highly purified erythroid progenitors from polycythemia vera patients. Our data demonstrate that in approximately 60% of the patients, expression of SHP-1 in the colony forming unit-erythroid population is diminished. The decreased expression of the protein may result from a transcriptional defect, as suggested by the diminished SHP-1 mRNA expression in the erythroid progenitors of these patients. Studies to determine the level of maturation of polycythemia vera and normal cells indicated that there was no difference between the two at early colony forming unit-erythroid stage of differentiation although polycythemia vera cells showed retarded differentiation kinetics at late colony forming unit-erythroid stage of differentiation. Furthermore, SHP-1 expression in normal colony forming unit-erythroid demonstrated downregulation of mRNA and protein levels during terminal differentiation, suggesting that its function is required for growth control during the early stages of erythropoiesis. These results indicate an important role for SHP-1 in the regulation of normal human erythroid progenitors and suggest that defective expression of the protein may contribute to the pathogenesis of polycythemia vera.