Impaired endothelial barrier function results in a persistent increase in endothelial permeability and vascular leakage. Repair of a dysfunctional endothelial barrier requires controlled restoration of adherens junctions, comprising vascular endothelial (VE)-cadherin and associated β-, γ-, α-, and p120-catenins. Little is known about the mechanisms by which recovery of VE-cadherin-mediated cell-cell junctions is regulated. Using the inflammatory mediator thrombin, we demonstrate an important role for the Src homology 2-domain containing tyrosine phosphatase (SHP2) in mediating recovery of the VE-cadherin-controlled endothelial barrier. Using SHP2 substrate-trapping mutants and an in vitro phosphatase activity assay, we validate β-catenin as a bona fide SHP2 substrate. SHP2 silencing and SHP2 inhibition both result in delayed recovery of endothelial barrier function after thrombin stimulation. Moreover, on thrombin challenge, we find prolonged elevation in tyrosine phosphorylation levels of VE-cadherin-associated β-catenin in SHP2-depleted cells. No disassembly of the VE-cadherin complex is observed throughout the thrombin response. Using fluorescence recovery after photobleaching, we show that loss of SHP2 reduces the mobility of VE-cadherin at recovered cell-cell junctions. In conclusion, our data show that the SHP2 phosphatase plays an important role in the recovery of disrupted endothelial cell-cell junctions by dephosphorylating VE-cadherin-associated β-catenin and promoting the mobility of VE-cadherin at the plasma membrane.