Phosphorylation is a reversible post-translational modification regulated by phosphorylase and dephosphorylase to mediate important cellular events. Src homology-2-containing protein tyrosine phosphatase 2 (SHP2) encoded by PTPN11 is the first identified oncogenic protein in protein tyrosine phosphatases family. Serving as a convergent node, SHP2 is involved in multiple cascade signaling pathways including Ras-Raf-MEK-ERK, PI3K-AKT, JAK-STAT and PD-1/PD-L1 pathways. Especially, the double-edged roles of SHP2 based on the substrate specificity in various biological contexts dramatically increase the effect complexity in different SHP2-associated diseases. Evidences suggest that by collaborating with other mutations in associated pathways, dysregulation of SHP2 contributes to the pathogenesis of different cancers, making SHP2 a promising therapeutic target for cancer treatment. SHP2 can either act as oncogenic factor or tumor suppressor in different diseases, and both the conserved catalytic dephosphorylation mechanism and the unique allosteric regulation mechanism of SHP2 provide opportunities for the development of SHP2 inhibitors and activators. To date, several small-molecule SHP2 inhibitors have advanced into clinical trials for mono- or combined therapy of cancers. Moreover, SHP2 activators and proteolysis-targeting chimera (PROTAC)-based degraders also display therapeutic promise. In this review, we comprehensively summarize the overall structures, regulation mechanisms, double-edged roles of SHP2 in both physiological and carcinogenic pathways, and SHP2 inhibitors in clinical trials. SHP2 activators and degraders are also briefly discussed. This review aims to provide in-depth understanding of the biological roles of SHP2 and highlight therapeutic potential of targeting SHP2.