PD-1 is an immunoreceptor that belongs to the immunoglobulin (Ig) superfamily and contains two tyrosine residues in the cytoplasmic region. Studies on PD-1-deficient mice have shown that PD-1 plays critical roles in establishment and/or maintenance of peripheral tolerance, but the mode of action is totally unknown. To study the molecular mechanism for negative regulation of lymphocytes through the PD-1 receptor, we generated chimeric molecules composed of the IgG Fc receptor type IIB (FcγRIIB) extracellular region and the PD-1 cytoplasmic region and expressed them in a B lymphoma cell line, IIA1.6. Coligation of the cytoplasmic region of PD-1 with the B cell receptor (BCR) in IIA1.6 transformants inhibited BCR-mediated growth retardation, Ca²⁺ mobilization, and tyrosine phosphorylation of effector molecules, including Igβ, Syk, phospholipase C-γ2 (PLCγ2), and ERK1/2, whereas phosphorylation of Lyn and Dok was not affected. Mutagenesis studies indicated that these inhibitory effects do not require the N-terminal tyrosine in the immunoreceptor tyrosine-based inhibitory motif-like sequence, but do require the other tyrosine residue in the C-terminal tail. This tyrosine was phosphorylated and recruited src homology 2-domain-containing tyrosine phosphatase 2 (SHP-2) on coligation of PD-1 with BCR. These results show that PD-1 can inhibit BCR signaling by recruiting SHP-2 to its phosphotyrosine and dephosphorylating key signal transducers of BCR signaling.