The inositol 5'-phosphatase, SHIP (also referred to as SHIP-1 or SHIP alpha), is expressed in all cells of the hematopoietic lineage. Depending on the cell type being investigated and the state of differentiation, SHIP isoforms of several different molecular masses (170, 160, 145, 135, 125, and 110 kDa) have been seen in immunoblots. However, the function of the individual isoforms and the effect of expressing multiple isoforms simultaneously are not understood. Some of these SHIP isoforms have recently been characterized at the level of primary sequence. In this report, we investigated the function of the recently characterized 135-kDa SHIP isoform (SHIP beta), which appears to possess the catalytic domain but lacks some of the protein-protein interaction motifs at the C terminus. By reconstituting SHIP-deficient DT40 B cells with either SHIP beta or the better-characterized p145 SHIP alpha, we addressed the function of SHIP beta in the complete absence of SHIP alpha. We observed that SHIP beta had enzymatic activity comparable with SHIP alpha and that SHIP beta was able to reconstitute F(c)gamma RIIB1-mediated inhibition of B cell receptor-induced signaling events such as calcium flux and Akt and mitogen-activated protein kinase activation. SHIP beta was readily phosphorylated in response to B cell receptor cross-linking with the inhibitory receptor F(c)gamma RIIB1 and SHIP beta also interacted with the adapter protein Shc. During these studies we also observed that the SHIP alpha or SHIP beta interaction with Grb2 is not required for F(c)gamma RIIB1-mediated inhibition of calcium flux. These data suggest that SHIP beta, which is normally expressed in B cells along with SHIP alpha, functions comparably with SHIP alpha and that these two isoforms are not likely to be antagonistic in their function in vivo.