The nonreceptor tyrosine phosphatase SHP2 has been at the center of cell signaling research for three decades. SHP2 is required to fully activate the RTK/RAS/ERK signaling cascade, although the underlying mechanisms are not completely understood. PTPN11, which encodes SHP2, is the first identified proto-oncogene that encodes a tyrosine phosphatase, with dominantly activating mutations detected in leukemias and solid tumors. However, SHP2 has pro- and antioncogenic effects, and the most recent data reveal opposite activities of SHP2 in tumor cells and microenvironment cells. Allosteric SHP2 inhibitors show promising antitumor effects and overcome resistance to inhibitors of RAS/ERK signaling in animal models. Many clinical trials with orally bioactive SHP2 inhibitors, alone or combined with other regimens, are ongoing for a variety of cancers worldwide, with therapeutic outcomes yet unknown. This review discusses the multifaceted functions of SHP2 in oncogenesis, preclinical studies, and clinical trials with SHP2 inhibitors in oncological treatment.