Focal adhesion kinase (pp125FAK) is a member of a growing family of structurally distinct protein tyrosine kinases that includes the recently identified FakB and PYK2/CAKbeta/RAFTK. Activation of pp125FAK has been functionally linked to the formation of focal adhesions, integrin-mediated sites of contact between the cell and the extracellular matrix. The carboxy-terminal domain of pp125FAK is also expressed as a separate protein called pp41/43FRNK (where FRNK represents pp125FAK-related non-kinase). Here we show that pp41/43FRNK acts as an inhibitor of pp125FAK by transiently blocking the formation of focal adhesions on fibronectin and constitutively reducing tyrosine phosphorylation of both pp125FAK and two focal adhesion proteins, tensin and paxillin. These inhibitory effects of pp41/43FRNK are reversed by co-expression of pp125FAK, suggesting that pp125FAK and pp41/43 FRNK compete for a common binding protein(s) whose association with pp125FAK is necessary for signalling by pp125FAK. We propose that pp41/43FRNK functions as an endogenous regulator of pp125FAK, thus providing an unusual means to regulate both tyrosine kinase activity and cellular adhesion to the extracellular matrix.