The balance between activation of T cells and their suppression by regulatory T cells (Treg) is dysregulated in autoimmune diseases and cancer. In the past decade, evidence has accumulated to suggest that autoimmune diseases not only feature defective Tregs, but also feature T cells that are resistant to suppression by Tregs. On the other hand, in cancer, T cells are unable to mount anti-tumor responses due to the Treg-enriched suppressive microenvironment. Much remains unknown about what regulates this interplay between T cells and Tregs. However, it has become clear that maintaining the tenuous balance between T cell activation and suppression by Tregs is essential for immune homeostasis and prevention of disease. In this work, we investigated the role of the protein tyrosine phosphatase SHP 1, in regulating T cell responses to T cell receptor (TCR) stimulation. SHP-1 has been defined as a negative regulator of TCR signaling based on studies in global SHP-1 knockout mice and immortalized cell lines. We expanded in-depth upon these findings by utilizing two mouse models in which SHP-1 is deleted specifically in T cells and a pharmacological inhibitor of SHP-1. With this approach, we show that SHP-1 limits the responsiveness of T cells to TCR stimulation in a cell-intrinsic manner. Furthermore, we identified a novel function of SHP-1 in regulating the susceptibility of T cells to Treg-mediated suppression. Thus, SHP-1 deficiency rendered naïve CD4+ and CD8+ T cells resistant to Treg-mediated suppression in vitro, and regulated in vivo CD4+ T cell susceptibility to Treg suppression under conditions of homeostatic expansion. Mechanistically, SHP-1-deficient T cells did not mediate resistance to Treg suppression via soluble factors in vitro. We specifically ruled out an influence of IL-4 signaling on Treg-resistance in SHP-1-deficient T cells, as previous work had shown that SHP-1-deficient T cells are hyper-sensitive to IL-4 and that IL-4 can induce wildtype T cells to resist suppression. Rather, SHP 1 controlled the activation of the PI3K/Akt pathway, the enhancement of which has been previously linked to the induction of T cell resistance to Treg suppression. Collectively, these data establish SHP 1 as a critical player in setting the threshold downstream of TCR signaling and identify a novel function of SHP 1 as a regulator of T cell susceptibility to Treg-mediated suppression in vitro and in vivo. Thus, SHP 1 and the PI3K/Akt pathway could represent potential immunotherapeutic targets to modulate susceptibility of T cells to Treg suppression. In addition to investigating the role of SHP-1 in T cells, we also preliminarily assessed the regulatory function of SHP-1 in Tregs. Previous work from our lab established that Tregs from global knockout SHP-1 mice were more suppressive than wildtype Tregs. Thus, we generated a mouse model in which SHP-1 is deleted specifically in Tregs to assess the Treg cell-intrinsic function of SHP-1. Preliminary results herein recapitulate the inhibitory role of SHP-1 on Treg function. Thus, SHP-1-deficient Tregs were more potently suppressive than wildtype Tregs. The dual role of SHP-1 in T cells and Tregs provides the possibility of inhibiting SHP-1 in Tregs for treatment of autoimmune disease, and inhibiting SHP-1 in T cells to boost anti-tumor responses. Overall, this work better informs immunotherapeutic strategies for autoimmune disease and cancer, and highlights the importance of targeted approaches to avoid counterproductive systemic effects.