The CYBB and NCF2 genes encode the phagocyte oxidase proteins gp91(PHOX) and p67(PHOX), respectively. These genes are transcribed after the promyelocyte stage of differentiation, and transcription continues until cell death. In undifferentiated myeloid cells, homologous cis-elements in the CYBB and NCF2 genes are repressed by the homeodomain transcription factor HoxA10. During cytokine-induced myelopoiesis, tyrosine phosphorylation of HoxA10 decreases binding affinity for the CYBB and NCF2 cis-elements. This abrogates HoxA10-induced transcriptional repression as differentiation proceeds. Therefore, mechanisms involved in differentiation stage-specific HoxA10 tyrosine phosphorylation are of interest because HoxA10 phosphorylation modulates myeloid-specific gene transcription. In this study, we found that HoxA10 is a substrate for SHP2 protein-tyrosine phosphatase in undifferentiated myeloid cells. In contrast, HoxA10 is a substrate for a constitutively active mutant form of SHP2 in both undifferentiated and differentiating myeloid cells. Expression of such SHP2 mutants results in persistent HoxA10 repression of CYBB and NCF2 transcription during myelopoiesis. Both HoxA10 overexpression and activating SHP2 mutations have been described in human myeloid malignancies. Therefore, our results suggest that these mutations could cooperate, leading to decreased myeloid-specific gene transcription and functional differentiation block in myeloid cells with both defects.