The protein tyrosine phosphatase SHP2, encoded by PTPN11, is an important regulator of Ras/MAPK signaling that acts downstream of receptor tyrosine kinases and other transmembrane receptors. Germline PTPN11 mutations cause developmental disorders such as Noonan Syndrome, whereas somatic mutations drive various cancers. While many pathogenic mutations enhance SHP2 catalytic activity, others are inactivating or affect protein interactions, confounding our understanding of SHP2-driven disease. Here, we combine single-cell transcriptional profiling of cells expressing clinically diverse SHP2 variants with protein biochemistry, structural analysis, and cell biology to explain how pathogenic mutations dysregulate signaling. Our analyses reveal that loss of catalytic activity does not phenocopy SHP2 knock-out at the gene expression level, that some mechanistically distinct mutations have convergent phenotypic effects, and that different mutations at the same hotspot residue can yield divergent cell states. These findings provide a framework for understanding the connection between SHP2 structural perturbations, cellular outcomes, and human diseases.