In briefThe establishment and maintenance of embryo implantation and pregnancy require decidualization of endometrial stromal cells. This paper reveals that SHP2 ensures the correct subcellular localization of progesterone receptor, thereby safeguarding the process of decidualization.AbstractDecidualization is the process of conversion of endometrial stromal cells into decidual stromal cells, which is caused by progesterone production that begins during the luteal phase of the menstrual cycle and then increases throughout pregnancy dedicated to support embryonic development. Decidualization deficiency is closely associated with various pregnancy complications, such as recurrent miscarriage (RM). Here, we reported that Src-homology-2-containing phospho-tyrosine phosphatase (SHP2), a key regulator in the signal transduction process downstream of various receptors, plays an indispensable role in decidualization. SHP2 expression was upregulated during decidualization. SHP2 inhibitor RMC-4550 and shRNA-mediated SHP2 reduction resulted in a decreased level of phosphorylation of ERK and aberrant cytoplasmic localization of progesterone receptor (PR), coinciding with reduced expression of IGFBP1 and various other target genes of decidualization. Solely inhibiting ERK activity recapitulated these observations. Administration of RMC-4550 led to decidualization deficiency and embryo absorption in mice. Moreover, reduced expression of SHP2 was detected in the decidua of RM patients. Our results revealed that SHP2 is key to PR's nuclear localization, thereby indispensable for decidualization and that reduced expression of SHP2 might be engaged in the pathogenesis of RM.