Objective-Insulin promotes adhesion of leukocytes to the endothelium through increased expression of surface adhesion molecules. We determined whether src-homology domain-2-containing protein tyrosine phosphatase 2 (SHP2), a downstream effecter of insulin signaling, is involved in insulin-induced endothelial inflammation. Methods and Results-In human umbilical vein-derived endothelial cells, treatment with insulin (100 nmol/L) increased Tyr phosphorylation, activity, and subsequently expression of SHP2. Increase in SHP2 accompanied a parallel decrease in the availability of the anti-inflammatory molecule, NO. This consequently enhanced the expression of cell adhesion molecules. Decrease in NO index was caused by endothelial NO synthase (eNOS) uncoupling and increased arginase activity. Among the 2 isoforms, insulin treatment induced the expression of arginase II. Inactivation of endogenous SHP2 via NSC87877 [8-hydroxy-7-(6-sulfonapthalen-2-yl)-diazenyl-quinoline-5-sulfonic acid] and its knockdown by small interfering RNA decreased arginase activity by blocking arginase II expression; however, it failed to restore eNOS coupling. Inactivation of SHP2 also abrogated insulin-mediated leukocyte adhesion by blocking the expression of adhesion molecules. Finally, downregulation of endogenous arginase II blocked insulin-mediated endothelial inflammation. Conclusion-SHP2 mediates chronic insulin-induced endothelial inflammation by limiting the production of NO in an eNOS-independent and arginase-II-dependent manner. © 2012 American Heart Association, Inc.