Gab2 (Grb2-associated binder-2), a member of the IRS (insulin receptor substrate)/Gab family of adapter proteins, undergoes tyrosine phosphorylation in response to cytokine or growth factor stimulation and serves as a docking platform for many signal transduction effectors, including the tyrosine phosphatase SHP-2 [SH2 (Src homology 2)-domain-containing tyrosine phosphatase]. Here, we report that, following IL-2 (interleukin-2) stimulation of human T lymphocytes, SHP-2 binds tyrosine residues 614 and 643 of human Gab2 through its N- and C-terminal SH2 domains respectively. However, the sole mutation of Tyr-614 into phenylalanine is sufficient to prevent Gab2 from recruiting SHP-2. Expression of the Gab2 Tyr-614-->Phe (Y614F) mutant, defective in SHP-2 association, prevents ERK (extracellular-signal-regulated kinase) activation and expression of a luciferase reporter plasmid driven by the c-fos SRE (serum response element), indicating that interaction of SHP-2 with Gab2 is required for ERK activation in response to IL-2. Further investigation of IL-2-dependent induction of SRE showed that expression of a constitutively active mutant of the RhoA GTPase synergizes with IL-2 for SRE-driven transcription, whereas a dominant-negative mutant reduces the IL-2 response. Thus, in response to IL-2, full induction of the SRE requires ERK-dependent as well as Rho-dependent signals that target the Ets-box and the CArG-box respectively. We also report that the synergy between Gab2/SHP-2 and RhoA for IL-2-dependent CArG-box-driven transcription depends upon MEK (mitogen-activated protein kinase/ERK kinase) activation, and is likely to involve regulation of the serum response factor co-activator MAL. Our studies thus provide new insights into the role of Gab2 and SHP-2 in IL-2 signal transduction.