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Background/Aims: Recently, we and others showed that the relative abundance of a specific vessel subtype, strongly positive for CD31 and Endomucin (CD31 hi Emcn hi ), is associated with bone formation and bone loss, and platelet-derived growth factor-BB (PDGF-BB) secreted by preosteoclasts induces the formation of the specific vessels and thereby stimulates osteogenesis. Inhibition of Src homology 2 domain-containing protein tyrosine phosphatase-2 (SHP-2) has been shown to block the fusion of preosteoclasts into mature osteoclasts. However, it is unclear whether inhibition of SHP-2 could promote preosteoclast-induced angiogenesis and then enhance bone formation. This study aimed to determine the effects of a specific SHP-2 inhibitor (NSC-87877) on CD31 hi Emcn hi vessel and bone formation. Methods: 3-month-old C57BL/6 mice were subjected to either ovariectomy (OVX) or sham operation. OVX mice were intraperitoneally injected with NSC-87877 and the control (sham) mice were treated with an equal volume of diluents (PBS). Two months later, bone samples from mice were collected for µCT, histological, immunohistochemical and immunofluorescent analyses to assess bone mass, osteogenic and osteoclastic acitivities, as well as the densities of CD31 hi Emcn hi vessels. A series of angiogenesis- related assays were performed to test the effects of NSC-87877 on the pro-angiogenic activities of preosteoclasts in vitro . Results: We found that NSC-87877 is sufficient to induce bone-sparing effects in OVX-induced osteoporotic mouse model. We also found that NSC-87877 induces higher numbers of preosteoclasts and CD31 hi Emcn hi vessels and higher levels of PDGF-BB in bone marrow of osteoporotic mice. In vitro assays showed that NSC-87877 prevents preosteoclast fusion, increases PDGF-BB production, and augments the pro-angiogenic abilities of preosteoclasts. Conclusion: Our results suggest that NSC-87877 can be used as a promising therapeutic agent for osteoporosis by inhibiting osteoclast formation and promoting preosteoclast-induced angiogenesis.