Src homology 2-domain containing protein tyrosine phosphatase 2 (SHP2), encoded by the Ptpn11 gene (Tyrosine-protein phosphatase non-receptor type 11), is a key downstream effector of PD-1/PD-L1 signaling and is likely important, in addition to immune modulation, in tumor development and vascular homeostasis. SHP2 conveys PD-1 mediated inhibitory signaling in T cells, and is emerging as a therapeutic target. Importantly, there is an association between immune checkpoint inhibitors (ICIs), immune-related adverse events (irAEs), and cardiovascular complications, underscoring the need to understand SHP2’s role in these processes. This review aims to summarize current knowledge on SHP2/PTPN11 biology, its role in immune regulation, cancer progression, and vascular homeostasis, and to discuss emerging therapeutic strategies targeting this pathway. The concept of using SHP2 inhibitors with immune checkpoint inhibitors (ICIs) is being investigated to address ICI resistance and to improve anti-tumor efficacy substantially. SHP2 is also being studied in non-cancer cell contexts, and signaling responses can differ by large magnitudes depending on the biological context and stimuli. Under normal circumstances, SHP2 promotes vascular homeostasis in endothelial cells (ECs) and myeloid cells and inhibits inflammation, and the reduction in SHP2 activity by oxidative stress, such as in atherosclerosis or diabetes, upregulates inflammation. In contrast, in response to radiation, the fibrotic response and subsequent lung injury were increased by endothelial SHP2 induction via Notch-Jag1 signaling. Vascular smooth muscle cells SHP2 act as a pro-atherogenic effector by enhancing ERK/MAPK signaling, and the upregulation of mitochondria localized SHP2 can also induce cellular senescence-associated inflammation by upregulating mitochondrial reactive oxygen species. Taken together, the two opposite signaling effects of SHP2 suggest that both the immune and vascular system responses appear to be more modulated by the redox, cell, and compartment-specific signaling of SHP2. More studies are needed for mitigating cardiovascular toxicity to patients, particularly with ICI-based treatment regimens.