The PDGF signaling pathway plays a major role in several biological systems, including vascular remodeling that occurs following percutaneous transluminal coronary angioplasty. Recent studies have shown that the LDL receptor-related protein 1 (LRP1) is a physiological regulator of the PDGF signaling pathway. The underlying mechanistic details of how this regulation occurs has yet to be resolved. Activation of the PDGF receptor beta; (PDGFR beta) leads to tyrosine phosphorylation of the LRP1 cytoplasmic domain and generates an LRP1 molecule with increased affinity for adaptor proteins such as SHP-2 that are involved in signaling pathways. SHP-2 is a protein tyrosine phosphatase that positively regulates the PDGFR beta; pathway, and is required for PDGF-mediated chemotaxis. We hypothesized that LRP1 may regulate the PDGFR beta; signaling pathway by binding SHP-2 and competing with the PDGFR beta; for this molecule. To quantify the interaction between SHP-2 and phosphorylated forms of the LRP1 intracellular domain, we utilized an ELISA with purified recombinant proteins. These studies revealed high affinity binding of SHP-2 to phosphorylated forms of both LRP1 intracellular domain and the PDGFR beta; kinase domain. Additionally, we were able to detect a complex between SHP-2, PDGFR beta; and LRP1 in primary human embryonic fibroblasts (WI38) by SHP-2 immunoprecipation after cross-linking proteins, using a reducible cross-linker, DSP. By employing a dynamin inhibitor, Dynasore, we established that PDGF-induced SHP-2 activation primarily occurs within endosomal compartments, the same compartments in which LRP1 is tyrosine phosphorylated by activated PDGFR beta;. Immunofluorescence studies in immortalized mouse SMCs (MOVAS), and WI38 cells revealed colocalization of LRP1 and SHP-2 following PDGF stimulation. Colocalization of SHP-2 and LRP1 was prominently seen within actin-based membrane structures, such as leading edge ruffles and circular dorsal ruffles. Furthermore, confocal microscopy utilizing phospho-SHP-2 staining revealed colocalization of LRP1 and SHP-2 in multivesicular bodies. To define the contribution of LRP1 to SHP-2-mediated PDGF chemotaxis and migration, we employed fibroblasts expressing LRP1 and deficient in LRP1 and a specific SHP-2 inhibitor, NSC-87877. Our results reveal that LRP1 modulates SHP-2-mediated PDGF-mediated chemotaxis and migration. Our data demonstrate that phosphorylated forms of LRP1 and PDGFR beta; compete for SHP-2 binding, and that expression of LRP1 attenuates SHP-2-mediated PDGF signaling events.