Updated project metadata. The protein tyrosine phosphatase SHP2 is crucial for oncogenic transformation of acute myeloid leukemia (AML) cells expressing mutated receptor tyrosine kinases (RTKs), as it is required for full RAS-ERK activation to promote cell proliferation and survival programs. SHP2 allosteric inhibitors act by stabilizing SHP2 in its auto-inhibited conformation and they are currently being tested in clinical trials for tumors with over-activation of the RAS/ERK pathway, alone and in various drug combinations. Using in vitro models, we established acquired resistant cell lines to the allosteric SHP2 inhibitor SHP099 from two FLT3-ITD-positive AML cell lines. We performed both label-free and isobaric labeling quantitative mass spectrometry-based phosphoproteomics to reveal that AML cells can restore phosphorylated ERK (pERK) in presence of SHP099, thus developing adaptive resistance. Mechanistically, SHP2 inhibition induces the tyrosine phosphorylation and feedback-activation of the FLT3 receptor, which in turn phosphorylates SHP2 on Tyrosine 62. This phosphorylation stabilizes SHP2 in its open conformation, preventing SHP099 binding, thus resulting in resistance. Combinatorial inhibition of SHP2 and MEK or SHP2 and FLT3 prevents pERK rebound and resistant cell growth. We observed the same mechanism in a FLT3-mutated B-ALL cell line and in the inv(16)/KITD816Y AML mouse model. Finally, we show that allosteric SHP2 inhibition does not impair the clonogenic ability of normal bone marrow progenitors, supporting its future use for clinical applications.