Mice carrying a hypomorphic point mutation in the Ptpn6 gene (Ptpn6^spin mice) develop an inflammatory skin disease that resembles neutrophilic dermatosis in humans. Here, we demonstrated that interleukin-1α (IL-1α) signaling through IL-1R and MyD88 in both stromal and immune cells drive inflammation in Ptpn6^spin mice. We further identified SYK as a critical kinase that phosphorylates MyD88, promoted MyD88-dependent signaling and mediates dermatosis in Ptpn6^spin mice. Our studies further demonstrated that SHP1 encoded by Ptpn6 binds and suppresses SYK activation to inhibit MyD88 phosphorylation. Downstream of SHP1 and SYK-dependent counterregulation of MyD88 tyrosine phosphorylation, we have demonstrated that the scaffolding function of receptor interacting protein kinase 1 (RIPK1) and tumor growth factor-β activated kinase 1 (TAK1)-mediating signaling were required to spur inflammatory disease. Overall, these studies identify SHP1 and SYK crosstalk as a critical regulator of MyD88 post-translational modifications and IL-1-driven inflammation.