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Nephrin, a critical podocyte membrane component that is reduced in diabetic nephropathy, has been shown to activate phosphotyrosine signaling pathways in human podocytes. Nephrin signaling is important to reduce cell death induced by apoptotic stimuli. We have previously shown that high glucose level exposure and diabetes increased the expression of SHP-1 causing podocyte apoptosis. SHP-1 possesses two SH2 domains that serve as docking elements to dephosphorylate tyrosine residues of target proteins. However, it remains unknown if SHP-1 interacts with nephrin and whether its elevated expression affects nephrin phosphorylation state in diabetes. Here we show that human podocytes exposed to high glucose levels exhibited elevated expression of SHP-1, which was associated with nephrin. Co-expression of nephrin-CD16 and SHP-1 reduced nephrin tyrosine phosphorylation in transfected human embryonic kidney 293 cells. Single tyrosine to phenylalanine mutation revealed that rat nephrin Tyr1127 and Tyr1152 are required to allow SHP-1 interaction with nephrin. Overexpression of dominant negative SHP-1 in human podocytes prevented high glucose-induced reduction of nephrin phosphorylation. In vivo, immunoblot analysis demonstrated that nephrin expression and phosphorylation were decreased in glomeruli of type 1 diabetic Akita mice (Ins2+/C96Y) compared to control littermate mice (Ins2+/+), and this was associated with elevated SHP-1 and cleaved caspase-3 expression. Furthermore, immunofluorescence analysis indicated increased co-localization of SHP-1 with nephrin in diabetic mice compared to control littermates. In conclusion, our results demonstrate that high glucose exposure increases SHP-1 interaction with nephrin causing decreased nephrin phosphorylation, which may in turn contribute to diabetic nephropathy. [ABSTRACT FROM AUTHOR]