Ship is an Src homology 2 domain containing inositol polyphosphate 5-phosphatase which has been implicated as an important signaling molecule in hematopoietic cells. In B cells, Ship becomes associated with Fcgamma receptor IIB (FcgammaRIIB), a low affinity receptor for the Fc portion of immunoglobulin (Ig)G, and is rapidly tyrosine phosphorylated upon B cell antigen receptor (BCR)-FcgammaRIIB coligation. The function of Ship in lymphocytes was investigated in Ship-/- recombination-activating gene (Rag)-/- chimeric mice generated from gene-targeted Ship-/- embryonic stem cells. Ship-/-Rag-/- chimeras showed reduced numbers of B cells and an overall increase in basal serum Ig. Ship-/- splenic B cells displayed prolonged Ca2+ influx, increased proliferation in vitro, and enhanced mitogen-activated protein kinase (MAPK) activation in response to BCR-FcgammaRIIB coligation. These results demonstrate that Ship plays an essential role in FcgammaRIIB-mediated inhibition of BCR signaling, and that Ship is a crucial negative regulator of Ca2+ flux and MAPK activation.