SHP2 (Src homology-2 domain-containing protein tyrosine phosphatase-2) is a non-receptor protein tyrosine phosphatase that removes tyrosine phosphorylation. Functionally, SHP2 serves as an important hub to connect several intracellular oncogenic signaling pathways, such as Jak/STAT, PI3K/AKT, RAS/Raf/MAPK, and PD-1/PD-L1 pathways. Mutations and/or overexpression of SHP2 has been associated with genetic developmental diseases and cancers. Because of the role of SHP2 plays in many diseases, the development of inhibitors targeting the catalytic site in SHP2 has been pursued for more than a decade, but none has advanced to clinical development. Recent discovery of allosteric inhibitors has inspired a novel approach to selectively target SHP2 via the noncatalytic site. To date, four SHP2 allosteric inhibitors have entered clinical trials for the treatment of solid tumors. This review will provide a summary of the physiological and biological functions of SHP2 and discuss the development of nonallosteric/allosteric SHP2 inhibitors in recent years.