Endocytosis of Eph receptors is critical for a number of biological processes, including modulating axon growth cone collapse response and regulating cell surface levels of receptor in epithelial cells. In particular, ephrin-A ligand stimulation of tumor cells induces EphA2 receptor internalization and degradation, a process that has been explored as a means to reduce tumor malignancy. However, the mechanism and regulation of ligand-induced Eph receptor internalization are not well understood. Here we show that SHIP2 (Src homology 2 domain-containing phosphoinositide 5-phosphatase 2) is recruited to activated EphA2 via a heterotypic sterile alpha motif (SAM)-SAM domain interaction, leading to regulation of EphA2 internalization. Overexpression of SHIP2 inhibits EphA2 receptor endocytosis, whereas suppression of SHIP2 expression by small interfering RNA-mediated gene silencing promotes ligand-induced EphA2 internalization and degradation. SHIP2 regulates EphA2 endocytosis via phosphatidylinositol 3-kinase-dependent Rac1 activation. Phosphatidylinositol 3,4,5-trisphosphate levels are significantly elevated in SHIP2 knockdown cells, phosphatidylinositol 3-kinase inhibitor decreases phosphatidylinositol 3,4,5-trisphosphate levels and suppresses increased EphA2 endocytosis. Ephrin-A1 stimulation activates Rac1 GTPase, and the Rac1-GTP levels are further increased in SHIP2 knockdown cells. A dominant negative Rac1 GTPase effectively inhibited ephrin-A1-induced EphA2 endocytosis. Together, our findings provide evidence that recruitment of SHIP2 to EphA2 attenuates a positive signal to receptor endocytosis mediated by phosphatidylinositol 3-kinase and Rac1 GTPase.