SHP-2 protein tyrosine phosphatase plays an important role in activation of the RAS-dependent signaling. Gain-of-function mutations in the PTPN11 gene, which encodes SHP-2, have been found in the leukemia-prone developmental disorder Noonan syndrome as well as sporadic childhood leukemias, indicating that SHP-2 is a bona fide human oncoprotein. However, the role of SHP-2 mutations in non-hematological malignancies remains obscure. Here, we screened for PTPN11 mutations in primary solid tumors and identified a 1520C>A mutation that causes threonine-507 to lysine (T507K) substitution in the phosphatase domain of SHP-2 in a case of hepatocellular carcinoma. T507K SHP-2 exhibited altered substrate specificity with slightly elevated basal phosphatase activity. Upon expression in NIH3T3 cells, T507K SHP-2 induced transformed foci, which was not observed with wild type, Noonan-specific or leukemia-specific SHP-2. Furthermore, NIH3T3 cells transformed by T507K SHP-2 showed anchorage-independent growth and developed tumors in nude mice. These results indicate that quantitative and/or qualitative alteration in phosphatase activity determines the transforming potential as well as target cell/tissue spectrum of individual SHP-2 mutants as oncoproteins. Although rare in solid tumors, the identified T507K SHP-2 represents a distinct class of SHP-2 mutants with oncogenic RAS-like transforming activity, which could contribute to the development of solid tumors.