The production, survival, and function of monocytes and macrophages is regulated by the macrophage colony-stimulating factor (M-CSF or CSF-1) through its tyrosine kinase receptor Ems. Binding of M-CSF to Ems induces the tyrosine phosphorylation and association of a 150-kD protein with the phosphotyrosine-binding (PTB) domain of She. We have cloned p150 using a modified yeast two-hybrid screen. p150 contains one SH2 domain, two potential PTB-binding sites, an ATP/GTP-binding domain, several potential SH3-binding sites, and a domain with homology to inositol polyphosphate-5-phosphatases. p150 antibodies detect this protein in FDC-P1 myeloid cells, but the same protein is not detectable in fibroblasts. The antibodies immunoprecipitate a 150-kD protein from quiescent or M-CSF-stimulated FDC-P1 cells that hydrolyzes PtdIns(3,4,5)P-3 to PtdIns(3,4)P-2. This activity is observed in Shc immunoprecipitates only after M-CSF stimulation. Retroviral expression of p150 in ED-Ems cells results in strong inhibition of cell growth in M-CSF and a lesser inhibition in IL-3. Ectopic expression of p150 in fibroblasts does not inhibit growth. This novel protein, p150(Ship) (SH2-containing inositol phosphatase), identifies a component of a new growth factor-receptor signaling pathway in hematopoietic cells.