Endorepellin, the C-terminal domain of perlecan, is a powerful angiogenesis inhibitor. To dissect the mechanism of endorepellin-mediated endothelial silencing, we used an antibody array against multiple tyrosine kinase receptors. Endorepellin caused a widespread reduction in phosphorylation of key receptors involved in angiogenesis and a concurrent increase in phosphatase activity in endothelial cells and tumor xenografts. These effects were efficiently hampered by function-blocking antibodies against integrin alpha2beta1, the functional endorepellin receptor. The Src homology-2 protein phosphatase-1 (SHP-1) coprecipitated with integrin alpha2 and was phosphorylated in a dynamic fashion after endorepellin stimulation. Genetic evidence was provided by lack of an endorepellin-evoked phosphatase response in microvascular endothelial cells derived from integrin alpha2beta1(-/-) mice and by response to endorepellin in cells genetically engineered to express the alpha2beta1 integrin, but not in cells either lacking this receptor or expressing a chimera harboring the integrin alpha2 ectodomain fused to the alpha1 intracellular domain. siRNA-mediated knockdown of integrin alpha2 caused a dose-dependent reduction of SHP-1. Finally, the levels of SHP-1 and its enzymatic activity were substantially reduced in multiple organs from alpha2beta1(-/-) mice. Our results show that SHP-1 is an essential mediator of endorepellin activity and discover a novel functional interaction between the integrin alpha2 subunit and SHP-1.