Ubiquitylation of receptor tyrosine kinases (RTKs) regulates their trafficking and lysosomal degradation. The multidomain scaffolding protein intersectin 1 (ITSN1) is an important regulator of this process. ITSN1 stimulates ubiquitylation of the epidermal growth factor receptor (EGFR) through enhancing the activity of the Cbl E3 ubiquitin ligase. However, the precise mechanism through which ITSN1 enhances Cbl activity is unclear. Here, we demonstrate that ITSN1 interacts with and recruits the Shp2 tyrosine phosphatase to Spry2 to enhance its dephosphorylation, thereby disrupting the inhibitory effect of Spry2 on Cbl and enhancing EGFR ubiquitylation. In contrast, expression of a catalytically inactive Shp2 mutant reversed the effect of ITSN1 on Spry2 dephosphorylation and decreased Cbl-mediated EGFR ubiquitylation. In addition, disruption of ITSN1 binding to Spry2 through point mutation of the Pro-rich ITSN1 binding site in Spry2 resulted in decreased Shp2-Spry2 interaction and enhanced Spry2 tyrosine phosphorylation. This study demonstrates that ITSN1 enhances Cbl activity, in part, by modulating the interaction of Cbl with Spry2 through recruitment of Shp2 phosphatase to the Cbl-Spry2 complex. These findings reveal a new level of complexity in the regulation of RTKs by Cbl through ITSN1 binding with Shp2 and Spry2.