In an effort to gain further insight into the conformational and topographical requirements for recognition by the N-terminal SH2 domain of protein tyrosine phosphatase SHP-1, we synthesized a series of linear and cyclic peptides derived from the sequence surrounding phosphotyrosine 2267 in the receptor tyrosine kinase Ros (EGLNpYMVL). A molecular modeling approach was used to suggest peptide modifications sterically compatible with the N-SH2-peptide binding groove and possibly enhanced binding affinities compared to the parent peptide. The potencies of the synthesized compounds were evaluated by assaying their ability to stimulate phosphatase activity as well as by their binding affinities to the GST-fused N-SH2 domain of SHP-1. In the series of linear peptides, structural modifications of Ros pY2267 in positions pY + 1 to pY + 3 by amino acid residues structurally related to Phe, for example l-erythro/threo-Abu(betaPh) (5a, 5b), yielded ligands with increased binding affinity. The incorporation of d-amino acid residues at pY + 1 and pY + 3 led to inactive peptides. The replacement of Phe in both pY + 1 and pY + 3 by Tic (1,2,3,4-tetrahydroisoquinoline-3-carboxylic acid) was also not tolerated due to steric hindrance. Cyclic peptides (13, 14) that were linked via residues in positions pY - 1 (Lys) and pY + 2 (Asp/Glu) and contained a Gly residue in the bridging unit displayed much lower potencies for the stimulation of SHP-1 activity but increased binding affinities compared to Ros pY2267. They partially competed with Ros pY2267 in the activation assay. Such cyclic structures may serve as scaffolds for competitive SHP-1 inhibitor design targeting N-SH2 domain-protein interactions that block SHP-1 activation.