Many intracellular targets of protein-tyrosine kinases possess Src homology 2 (SH2) domains that directly recognize phosphotyrosine-containing sites on autophosphorylated growth factor receptors and cytoplasmic proteins, and thereby mediate the activation of biochemical signalling pathways. SH2 domains possess relatively well conserved residues that form the phosphotyrosine-binding pocket, and more variable residues that are implicated in determining binding specificity by recognition of the three amino acids carboxy-terminal to phosphotyrosine (the +1 to +3 positions). One such residue, occupying the EF1 position of the +3-binding pocket, is a Thr in the SH2 domain of the Src tyrosine kinase, but is predicted to be a Trp in the SH2 domain of the Sem-5/drk/Grb2 adaptor protein. Here we report that changing this residue in the Src SH2 domain from Thr to Trp switches its selectivity to resemble that of the Sem-5/drk/Grb2 SH2 domain. Furthermore, this mutant Src SH2 domain effectively substitutes for the SH2 domain of the Sem-5 protein in activation of the Ras pathway in vivo. These results identify a residue that can modify SH2 selectivity, and indicate that the biological activity of an SH2 domain correlates with its binding specificity.