The Src family protein tyrosine kinases participate in signalling through cell surface receptors that lack intrinsic tyrosine kinase domains. All nine members of this family possess adjacent Src homology (SH2 and SH3) domains, both of which are essential for repression of the enzymatic activity. The repression is mediated by binding between the SH2 domain and a C-terminal phosphotyrosine, and the SH3 domain is required for this interaction. However, the biochemical basis of functional SH2-SH3 interaction is unclear. Here, we demonstrate that when the SH2 and SH3 domains of p59fyn (Fyn) were present as adjacent domains in a single protein, binding of phosphotyrosyl peptides and proteins to the SH2 domain was enhanced, whereas binding of a subset of cellular polypeptide ligands to the SH3 domain was decreased. An interdomain communication was further revealed by occupancy with domain-specific peptide ligands: occupancy of the SH3 domain with a proline-rich peptide enhanced phosphotyrosine binding to the linked SH2 domain, and occupancy of the SH2 domain with phosphotyrosyl peptides enhanced binding of certain SH3-specific cellular polypeptides. Second, we demonstrate a direct binding between purified SH2 and SH3 domains of Fyn and Lck Src family kinases. Heterologous binding between SH2 and SH3 domains of closely related members of the Src family, namely, Fyn, Lck, and Src, was also observed. In contrast, Grb2, Crk, Abl, p85 phosphatidylinositol 3-kinase, and GTPase-activating protein SH2 domains showed lower or no binding to Fyn or Lck SH3 domains. SH2-SH3 binding did not require an intact phosphotyrosine binding pocket on the SH2 domain; however, perturbations of the SH2 domain induced by specific high-affinity phosphotyrosyl peptide binding abrogated binding of the SH3 domain. SH3-SH2 binding was observed in the presence of proline-rich peptides or when a point mutation (W119K) was introduced in the putative ligand-binding pouch of the Fyn SH3 domain, although these treatments completely abolished the binding to p85 phosphatidylinositol 3-kinase and other SH3-specific polypeptides. These biochemical SH2-SH3 interactions suggest novel mechanisms of regulating the enzymatic activity of Src kinases and their interactions with other proteins.