Treatment of quiescent NIH3T3 cells with PDGF BB results in the transient activation and hyperphosphorylation of the protein-tyrosine kinase, c-Src. These effects correlate with novel serine and tyrosine phosphorylations in the N-terminal non-catalytic region of the molecule, which contains an SH3 and SH2 domain. In this study, a site of PDGF-induced tyrosine phosphorylation was mapped to Tyr 138 in the SH3 domain; Tyr 138 is exposed on the SH3 peptide binding surface. This same site is phosphorylated in vitro by the PDGF receptor when purified baculovirus-expressed c-Src is complexed with the activated receptor. Phosphorylation of Tyr 138 required association of c-Src with the PDGF receptor via its SH2 domain. When a c-Src Phe 138 mutant was stably expressed in Src- mouse fibroblasts, it was activated to the same extent as wild type c-Src following PDGF stimulation, indicating that phosphorylation of this site is not required for PDGF-mediated activation. However, Tyr 138 phosphorylation was found to diminish SH3 domain peptide ligand binding ability in vitro.