Phosphoinositides are membrane-bound signaling molecules that recruit, activate and localize target effectors to intracellular membranes regulating apoptosis, cell proliferation, insulin signaling and membrane trafficking. The SH2 domain containing inositol polyphosphate 5-phosphatase-2 (SHIP2) hydrolyzes phosphatidylinositol 3,4,5-trisphosphate (PtdIns(3,4,5)P3) generating phosphatidylinositol 3,4-bisphosphate (PtdIns(3,4)P2). Overexpression of SHIP2 inhibits insulin-stimulated phosphoinositide 3-kinase (PI3K) dependent signaling events. Analysis of diabetic human subjects has revealed an association between SHIP2 gene polymorphisms and type 2 diabetes mellitus. Genetic ablation of SHIP2 in mice has generated conflicting results. SHIP2 knockout mice were originally reported to show lethal neonatal hypoglycemia resulting from insulin hypersensitivity, but in addition to inactivating the SHIP2 gene, the Phox2a gene was also inadvertently deleted. Another SHIP2 knockout mouse has now been generated which inactivates the SHIP2 gene but leaves Phox2a intact. These animals show normal insulin and glucose tolerance but are highly resistant to weight gain on high fat diets, exhibiting an obesity-resistant phenotype. Therefore, SHIP2 remains a significant therapeutic target for the treatment of both obesity and type 2 diabetes.