Chronic low-grade inflammation plays an important role in the pathogenesis of type 2 diabetes. Src homology 2 domain-containing tyrosine phosphatase-2 (SHP2) has been reported to play diverse roles in different tissues during the development of metabolic disorders. We previously reported that SHP2 inhibition in macrophages results in increased cytokine production. Here, we investigated the association between SHP2 inhibition in macrophages and the development of metabolic diseases. Unexpectedly, we found that mice with a conditional SHP2 knockout in macrophages (cSHP2-KO) have ameliorated metabolic disorders. cSHP2-KO mice fed a high-fat diet (HFD) gained less body weight and exhibited decreased hepatic steatosis, as well as improved glucose intolerance and insulin sensitivity, compared with HFD-fed WT littermates. Further experiments revealed that SHP2 deficiency leads to hyperactivation of caspase-1 and subsequent elevation of interleukin 18 (IL-18) levels, both in vivo and in vitro Of note, IL-18 neutralization and caspase-1 knockout reversed the amelioration of hepatic steatosis and insulin resistance observed in the cSHP2-KO mice. Administration of two specific SHP2 inhibitors, SHP099 and Phps1, improved HFD-induced hepatic steatosis and insulin resistance. Our findings provide detailed insights into the role of macrophagic SHP2 in metabolic disorders. We conclude that pharmacological inhibition of SHP2 may represent a therapeutic strategy for the management of type 2 diabetes.