Abnormal activation of receptor tyrosine kinases (RTKs) contributes to tumorigenesis, while protein tyrosine phosphatases (PTPs) contribute to tumor control. One of the most representative PTPs is Src homology region 2 (SH2) domain-containing phosphatase 1 (SHP-1), which is associated with either an increased or decreased survival rate depending on the cancer type. Hypermethylation in the promoter region of PTPN6, the gene for the SHP-1 protein, is a representative epigenetic regulation mechanism that suppresses the expression of SHP-1 in tumor cells. SHP-1 comprises two SH2 domains (N-SH2 and C-SH2) and a catalytic PTP domain. Intramolecular interactions between the N-SH2 and PTP domains inhibit SHP-1 activity. Opening of the PTP domain by a conformational change in SHP-1 increases enzymatic activity and contributes to a tumor control phenotype by inhibiting the activation of the Janus kinase/signal transducer and activator of transcription (JAK/STAT3) pathway. Although various compounds that increase SHP-1 activation or expression have been proposed as tumor therapeutics, except sorafenib and its derivatives, few candidates have demonstrated clinical significance. In some cancers, SHP-1 expression and activation contribute to a tumorigenic phenotype by inducing a tumor-friendly microenvironment. Therefore, developing anticancer drugs targeting SHP-1 must consider the effect of SHP-1 on both cell biological mechanisms of SHP-1 in tumor cells and the tumor microenvironment according to the target cancer type. Furthermore, the use of combination therapies should be considered.