Janus kinases (JAKs) are cytoplasmic tyrosine kinases critical for signaling by growth hormone (GH) and many other ligands that bind to members of the cytokine receptor superfamily. SH2-Bβ was previously identified as a JAK2-interacting protein that is tyrosyl phosphorylated in response to GH and other cytokines that activate JAK2. In this study, we examined whether SH2-Bβ alters the activity of JAK2. SH2-Bβ, when coexpressed with JAK2, significantly increased the tyrosyl phosphorylation of JAK2 and multiple other cellular proteins and stimulated the kinase activity of JAK2 by ≈20-fold. Coexpression of SH2-Bβ with JAK2 dramatically increased tyrosyl phosphorylation of signal transducer and activator of transcription (Stat)5B and Stat3, physiological substrates of JAK2. SH2-Bβ(R555E) with a defective Src homology 2 domain was unable to stimulate JAK2 and JAK2-mediated tyrosyl phosphorylation of Stat5B and Stat3. More importantly, SH2-Bβ enhanced GH-induced tyrosyl phosphorylation of endogenous JAK2 and ligand-induced tyrosyl phosphorylation of Stat5B by endogenous JAK2. In contrast, SH2-Bβ did not potentiate the activation of other tyrosine kinases including the receptors for platelet-derived growth factor, epidermal growth factor, or nerve growth factor (TrkA), tyrosine kinases that also bind SH2-Bβ. These data demonstrate that SH2-Bβ is a potent cytoplasmic activator of JAK2 and is thereby expected to be an important cellular regulator of signaling by GH and other hormones and cytokines that activate JAK2.