The ability to design proteins with desired properties by using protein structural information will allow us to create high-value therapeutic and diagnostic products. Using the protein structures of lambda lysozyme and the SH3 domain of human Crk, we designed a synthetic protein switch that controls the activity of lysozyme by sterically hindering its active cleft through the binding of SH3 to its CB1 peptide-binding partner. First, several fusion protein designs with lysozyme and CB1 were modeled to determine the one with greatest steric effect in the presence of SH3. Next, the selected fusion protein was created and tested in vitro. In the absence of SH3, the lysozyme-CB1 fusion protein functioned normally. In the presence of SH3, the lysozyme activity was inhibited and with the addition of excess CB1 peptides to compete for SH3 binding, the lysozyme activity was restored. Lastly, this structure-based strategy can be used to engineer synthetic regulation by peptide-domain-binding interfaces into a variety of proteins.