How do distinct protein-tyrosine kinases activate specific down-stream events? Src-homology-2 (SH2) domains on tyrosine kinases or targets of tyrosine kinases recognize phosphotyrosine in a specific sequence context and thereby provide some specificity. The role of the catalytic site of tyrosine kinases in determining target specificity has not been fully investigated. Here we use a degenerate peptide library to show that each of nine tyrosine kinases investigated has a unique optimal peptide substrate. We find that the cytosolic tyrosine kinases preferentially phosphorylate peptides recognized by their own SH2 domains or closely related SH2 domains (group I; ref. 3), whereas receptor tyrosine kinases preferentially phosphorylate peptides recognized by subsets of group III SH2 domains. The importance of these findings for human disease is underscored by our observation that a point mutation in the RET receptor-type tyrosine kinase, which causes multiple endocrine neoplasia type 2B, results in a shift in peptide substrate specificity.