Deficiency in Src homology region 2 domain-containing phosphatase 1/protein tyrosine phosphatase nonreceptor type 6 (SHP1/PTPN6) is linked with chronic inflammatory diseases and hematological malignancies in humans. In this study, we exploited the embryonic and larval stages of zebrafish (Danio rerio) as an animal model to study ptpn6 function in the sole context of innate immunity. We show that ptpn6 knockdown induces a spontaneous inflammation-associated phenotype at the late larval stage. Surprisingly, glucocorticoid treatment did not suppress inflammation under ptpn6 knockdown conditions but further enhanced leukocyte infiltration and proinflammatory gene expression. Experiments in a germ-free environment showed that the late larval phenotype was microbe independent. When ptpn6 knockdown embryos were challenged with Salmonella typhimurium or Mycobacterium marinum at earlier stages of development, the innate immune system was hyperactivated to a contraproductive level that impaired the control of these pathogenic bacteria. Transcriptome analysis demonstrated that Kyoto Encyclopedia of Genes and Genomes pathways related to pathogen recognition and cytokine signaling were significantly enriched under these conditions, suggesting that ptpn6 functions as a negative regulator that imposes a tight control over the level of innate immune response activation during infection. In contrast to the hyperinduction of proinflammatory cytokine genes under ptpn6 knockdown conditions, anti-inflammatory il10 expression was not hyperinduced. These results support that ptpn6 has a crucial regulatory function in preventing host-detrimental effects of inflammation and is essential for a successful defense mechanism against invading microbes.