Estrogen and progesterone coupled with locally produced signaling molecules are essential for embryo implantation. However, the hierarchical landscape of the molecular pathways that governs this process remains largely unexplored. Here we show that the protein tyrosine phosphatase Shp2, a positive transducer of RTK signaling, is predominately localized in the nuclei in the periimplantation mouse uterus. Uterine-specific deletion of Shp2 exhibits reduced progesterone receptor (PR) expression and progesterone resistance, which derails normal uterine receptivity, leading to complete implantation failure in mice. Notably, the PR expression defects are attributed to the limited estrogen receptor α (ERα) activation in uterine stroma. Further analysis reveals that nuclear Shp2, rather than cytosolic Shp2, promotes the ERα transcription activity. This function is achieved by enhancing the Src kinase-mediated ERα tyrosine phosphorylation, which facilitates ERα binding to Pgr promoter in an ERK-independent manner in periimplantation uteri. Besides uncovering a regulatory mechanism, this study could be clinically relevant to dysfunctional ERα-caused endometrial disorders in women.