Shp2 is a cytoplasmic protein-tyrosine phosphatase that is essential for normal development. Activating and inactivating mutations have been identified in humans to cause the related Noonan and LEOPARD syndromes, respectively. The cell biological cause of these syndromes remains to be determined. We have used the zebrafish to assess the role of Shp2 in early development. Here, we report that morpholino-mediated knockdown of Shp2 in zebrafish resulted in defects during gastrulation. Cell tracing experiments demonstrated that Shp2 knockdown induced defects in convergence and extension cell movements. In situ hybridization using a panel of markers indicated that cell fate was not affected by Shp2 knock down. The Shp2 knockdown–induced defects were rescued by active Fyn and Yes and by active RhoA. We generated mutants of Shp2 with mutations that were identified in human patients with Noonan or LEOPARD Syndrome and established that Noonan Shp2 was activated and LEOPARD Shp2 lacked catalytic protein-tyrosine phosphatase activity. Expression of Noonan or LEOPARD mutant Shp2 in zebrafish embryos induced convergence and extension cell movement defects without affecting cell fate. Moreover, these embryos displayed craniofacial and cardiac defects, reminiscent of human symptoms. Noonan and LEOPARD mutant Shp2s were not additive nor synergistic, consistent with the mutant Shp2s having activating and inactivating roles in the same signaling pathway. Our results demonstrate that Shp2 is required for normal convergence and extension cell movements during gastrulation and that Src family kinases and RhoA were downstream of Shp2. Expression of Noonan or LEOPARD Shp2 phenocopied the craniofacial and cardiac defects of human patients. The finding that defective Shp2 signaling induced cell movement defects as early as gastrulation may have implications for the monitoring and diagnosis of Noonan and LEOPARD syndrome.