Src family kinase (SFK) activity is elevated in many cancers, and this activity correlates with aggressive tumor behavior. The α6β4 integrin, which is also associated with a poor prognosis in many tumor types, can stimulate SFK activation; however, the mechanism by which it does so is not known. In the current study, we provide novel mechanistic insight into how the α6β4 integrin selectively activates the Src family member Fyn in response to receptor engagement. Both catalytic and noncatalytic functions of SHP2 are required for Fyn activation by α6β4. Specifically, the tyrosine phosphatase SHP2 is recruited to α6β4 and its catalytic activity is stimulated through a specific interaction of its N-terminal SH2 domain with pY1494 in the β4 subunit. Fyn is recruited to the α6β4/SHP2 complex through an interaction with phospho-Y580 in the C terminus of SHP2. In addition to activating Fyn, this interaction with Y580-SHP2 localizes Fyn to sites of receptor engagement, which is required for α6β4-dependent invasion. Of significance for tumor progression, phosphorylation of Y580-SHP2 and SFK activation are increased in orthotopic human breast tumors that express α6β4 and activation of this pathway is dependent upon Y1494.