The adhesion receptor SHPS-1 activates the protein-tyrosine-phosphatase SHP-2 and thereby promotes integrin-mediated reorganization of the cytoskeleton. SHPS-1 also contributes to cell-cell communication through association with CD47. Although functional alteration of SHPS-1 is implicated in cellular transformation, the role of the CD47-SHPS-1 interaction in carcinogenesis has been unclear. A soluble SHPS-1 ligand (CD47-Fc) has now been shown to bind to Melan-a non-tumorigenic melanocytes but not to syngeneic B16F10 melanoma cells. Treatment of B16F10 cells with 1-deoxymannojirimycin, which prevents N-glycan processing, restored the ability of SHPS-1 derived from these cells to bind CD47-Fc in vitro, indicating that aberrant N-glycosylation of SHPS-1 impairs CD47 binding in B16F10 cells. CD47-Fc inhibited the migration of Melan-a cells but not that of B16F10 cells. However, a monoclonal antibody that reacts with SHPS-1 on both Melan-a and B16F10 cells inhibited the migration of both cell types similarly. CD47 binding induced proteasome-mediated degradation of SHPS-1 in a tyrosine phosphorylation-independent manner. Furthermore, overexpression of SHPS-1 reduced the level of tyrosine phosphorylation of focal adhesion kinase, and this effect was reversed by CD47 binding. These results suggest that CD47 binds to and thereby down-regulates SHPS-1 on adjacent cells, resulting in inhibition of cell motility. Resistance to this inhibitory mechanism may contribute to the highly metastatic potential of B16 melanoma.