Recent studies in mice have demonstrated that the protein tyrosine phosphatase SHP-1 is a crucial negative regulator of proinflammatory cytokine signaling, TLR signaling, and inflammatory gene expression. Furthermore, mice genetically lacking SHP-1 (me/me) display a profound susceptibility to inflammatory CNS demyelination relative to wild-type mice. In particular, SHP-1 deficiency may act predominantly in inflammatory macrophages to increase CNS demyelination as SHP-1-deficient macrophages display coexpression of inflammatory effector molecules and increased demyelinating activity in me/me mice. Recently, we reported that PBMCs of multiple sclerosis (MS) patients have a deficiency in SHP-1 expression relative to normal control subjects indicating that SHP-1 deficiency may play a similar role in MS as to that seen in mice. Therefore, it became essential to examine the specific expression and function of SHP-1 in macrophages from MS patients. Herein, we document that macrophages of MS patients have deficient SHP-1 protein and mRNA expression relative to those of normal control subjects. To examine functional consequences of the lower SHP-1, the activation of STAT6, STAT1, and NF-kappaB was quantified and macrophages of MS patients showed increased activation of these transcription factors. In accordance with this observation, several STAT6-, STAT1-, and NF-kappaB-responsive genes that mediate inflammatory demyelination were increased in macrophages of MS patients following cytokine and TLR agonist stimulation. Supporting a direct role of SHP-1 deficiency in altered macrophage function, experimental depletion of SHP-1 in normal subject macrophages resulted in an increased STAT/NF-kappaB activation and increased inflammatory gene expression to levels seen in macrophages of MS patients. In conclusion, macrophages of MS patients display a deficiency of SHP-1 expression, heightened activation of STAT6, STAT1, and NF-kappaB and a corresponding inflammatory profile that may be important in controlling macrophage-mediated demyelination in MS.