The Src family of kinases are held in an inactive state by interaction of their SH2 domain with a C-terminal phosphotyrosine. Dephosphorylation of this site can reactivate Src; however, recent evidence suggests that activation can also occur without dephosphorylation. In this study, platelet-derived growth factor receptor phosphorylation of Src on Tyr-213 specifically blocked binding of its SH2 domain to a phosphopeptide corresponding to the C-terminal regulatory sequence, while binding to other sequences, such as the platelet-derived growth factor receptor or a peptide from the epidermal growth factor receptor, was unaffected. Consequently, Src was activated over 50-fold. This is the first demonstration of regulation of a SH2 domain specificity by post-translational modification and is likely to be a general mechanism for regulation of all Src-like kinases.