The phosphoinositide phosphatase SHIP is a critical regulator of immune cell activation. Despite considerable study, the mechanisms controlling SHIP activity to ensure balanced cell activation remain incompletely understood. SHIP dampens BCR signaling in part through its association with the inhibitory coreceptor Fc gamma receptor IIB, and serves as an effector for other inhibitory receptors in various immune cell types. The established paradigm emphasizes SHIP's inhibitory receptor‐dependent function in regulating phosphoinositide 3‐kinase signaling by dephosphorylating the phosphoinositide PI(3,4,5)P₃; however, substantial evidence indicates that SHIP can be activated independently of inhibitory receptors and can function as an intrinsic brake on activation signaling. Here, we integrate historical and recent reports addressing the regulation and function of SHIP in immune cells, which together indicate that SHIP acts as a multifunctional protein controlled by multiple regulatory inputs, and influences downstream signaling via both phosphatase‐dependent and ‐independent means. We further summarize accumulated evidence regarding the functions of SHIP in B cells, T cells, NK cells, dendritic cells, mast cells, and macrophages, and data suggesting defective expression or activity of SHIP in autoimmune and malignant disorders. Lastly, we discuss the biological activities, therapeutic promise, and limitations of small molecule modulators of SHIP enzymatic activity.