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Abstract Background The interaction between Src homology 2 domain-containing protein tyrosine phosphatase (SHP-2) of gastric epithelial cells and cagA from H. pylori plays a crucial role in developments of gastric atrophy and gastric cancer. This study aimed to investigate the association of haplotype tagging SNPs (htSNPs) in the PTPN11 gene encoding SHP-2 with gastric atrophy and gastric cancer in Chinese population. Methods The subjects comprised 414 patients with gastric cancer, 109 individuals with gastric atrophy and 923 healthy controls. Blood was collected from October 2008 to October 2010. Five htSNPs rs2301756, rs12423190, rs12229892, rs7958372 and rs4767860 from the PTPN11 gene were selected and genotyped by Taqman assay. Serum Ig G antibodies to H. pylori were detected by ELISA. Gastric atrophy was screened by the levels of serum pepsinogenIandII, and confirmed by endoscopy and histopatholgical examinations. Odds ratio (ORs) and 95% confidence intervals (CIs) were calculated by a multivariate logistic regression. Results Among H. pylori seropositive subjects, age and gender-adjusted OR of gastric atrophy was 2.47 (95%CI 1.13-4.55, P = 0.02) for CC genotype compared with CT/TT genotypes, suggesting a recessive model of genetic risk for rs12423190. The prevalence of H. pylori seropositivity were significantly higher in groups of gastric cancer and gastric atrophy compared to the control group (70.3% vs. 75.2% vs. 49.7%, P Conclusions Our study provides the first evidence that rs12423190 polymorphism of the PTPN11 gene is significantly associated with an increased risk of gastric atrophy in H. pylori infected Chinese Han population, suggesting that rs12423190 polymorphism could be used as a useful marker of genetic susceptibility to gastric atrophy among H. pylori infected subjects. The biological roles of this polymorphism require a further investigation.