The Src homology 3 (SH3) domain, located in the amino-terminal, noncatalytic half of pp60src, is highly conserved among members of the Src family of tyrosine kinases. SH3 domains have also been identified in a variety of proteins otherwise unrelated to protein-tyrosine kinases. The presence of SH3 domains in proteins with diverse functions suggests this domain may be important for directing protein-protein interactions necessary for protein function or cellular localization. To explore possible interactions between the SH3 domain and cellular proteins, we have established conditions for the isolation of proteins that bind in solution to the Src SH3 domain. A 67-amino acid fragment of c-Src containing either the entire glutathione S-transferase-SH3 domain (GST-SH3) or the SH3 domain from the neuronal form of c-Src (GST-SH3+) was expressed as a glutathione S-transferase fusion protein. The GST fusion proteins were incubated with lysates from [35S]methionine-labeled Balb/c 3T3 cells or v-Src-transformed Balb/c 3T3 cells. We found that GST-SH3, but not wild-type GST, specifically interacted with multiple cellular proteins, whereas GST-SH3+ only weakly associated with a small subset of these proteins. The majority of the SH3-binding proteins were found in particulate and detergent-insoluble cell fractions. Anti-phosphotyrosine immunoblots of the SH3-binding proteins revealed that several of the SH3-binding proteins are phosphorylated on tyrosine in v-Src-transformed cells. In addition, a number of the SH3-binding proteins were phosphorylated on serine and/or threonine in in vitro kinase assays, suggesting that one or more of the SH3-binding proteins has kinase activity. We identified paxillin, a vinculin-binding protein, as one of the Src SH3-binding proteins. This finding strongly supports the hypothesis that SH3 domains may be involved in subcellular localization of proteins to cytoskeleton and/or cellular membranes.