Abstract The maturation and function of osteoblasts (OBs) rely heavily on the reversible phosphorylation of signaling proteins. To date, most of the work in OBs has focused on phosphorylation by tyrosyl kinases, but little has been revealed about dephosphorylation by protein tyrosine phosphatases (PTPases). SHP2 (encoded by PTPN11) is a ubiquitously expressed PTPase. PTPN11 mutations are associated with both bone and cartilage manifestations in patients with Noonan syndrome (NS) and metachondromatosis (MC), although the underlying mechanisms remain elusive. Here, we report that SHP2 deletion in bone gamma-carboxyglutamate protein-expressing (Bglap +) bone cells leads to massive osteopenia in both trabecular and cortical bones due to the failure of bone cell maturation and enhanced osteoclast activity, and its deletion in Bglap + chondrocytes results in the onset of enchondroma and osteochondroma in aged mice with increased tubular bone length. Mechanistically, SHP2 was found to be required for osteoblastic differentiation by promoting RUNX2/OSTERIX signaling and for the suppression of osteoclastogenesis by inhibiting STAT3-mediated RANKL production by osteoblasts and osteocytes. These findings are likely to explain the compromised skeletal system in NS and MC patients and to inform the development of novel therapeutics to combat skeletal disorders.