Anaplastic lymphoma kinase (ALK)-positive anaplastic large cell lymphoma (ALK+ ALCL) is characterized by constitutive activation of the Janus kinase (JAK) 3/signal transducers and activators of transcription 3 (STAT3) signaling pathway. SHP1, a tyrosine phosphatase that negatively regulates JAK/STAT, is frequently absent in ALK+ ALCL owing to gene methylation. To test the hypothesis that loss of SHP1 contributes to JAK3/STAT3 activation in ALK+ ALCL cells, we induced SHP1 expression using 5-aza-2′-deoxycytidine (5-AZA), an inhibitor of DNA methyltransferase, in ALK+ ALCL cell lines, and correlated with changes in the JAK3/STAT3 pathway. 5-AZA gradually restored SHP1 expression in Karpas 299 and SU-DHL-1 cells over 5 days. The initially low level of SHP1 expression did not result in significant changes to the expression or tyrosine phosphorylation of JAK3 and STAT3. However, higher levels of SHP1 seen subsequently correlated with substantial decreases in JAK3 and pJAK3, followed by pSTAT3 (but not STAT3). Importantly, the decrease in JAK3 was abrogated by MG132, a proteasome inhibitor. 5-AZA induced no significant increase in apoptosis but it sensitized ALCL cells to doxorubicin-induced apoptosis. Our findings support the concept that loss of SHP1 contributes to the constitutive activation of JAK3/STAT3 in ALK+ ALCL cells. SHP1 appears to downregulate JAK3 by two mechanisms: tyrosine dephosphorylation and increased degradation via the proteasome pathway.