The 120 kD product of the c-cbl oncogene is rapidly tyrosine phosphorylated and recruited to the EGF receptor following ligand binding. Cbl's oncogenic potential is activated by a large carboxy-terminal truncation that generated v-cbl and removes the Ring finger and proline-rich SH3-binding domains. Here we show that this truncation reveals a novel and highly conserved domain that can interact directly with the EGF receptor in a phosphorylation dependent manner. Furthermore we demonstrate that the v-cbl domain is not utilized by c-cbl for recruitment to the receptor since this binding property is not evident in c-cbl constructs with proline domain deletions, and it is only revealed following deletion of the Ring finger. We also analyse a loss-of-function mutation from the C. elegans homologue, sli-1, and show that the corresponding mutation in v-cbl ablates transformation and EGF receptor association. Thus our findings provide further evidence that v-cbl possesses a novel and evolutionarily conserved phosphotyrosine binding domain and that the dual capability of EGF receptor binding by cbl involves two distinct mechanisms. In addition these findings raise the possibility that v-cbl may transform by competing with c-cbl for phosphorylated binding sites on activated receptor complexes.