The catalytic function of Src-related tyrosine protein kinases is repressed by phosphorylation of a conserved carboxy-terminal tyrosine residue. Recent studies suggest that this inhibitory event is not the result of autophosphorylation but that it is mediated by another cytoplasmic tyrosine protein kinase, termed p50^csk. In this report, we have evaluated the processes regulating the extent of phosphorylation of the inhibitory carboxy-terminal tyrosine residue of p56^lck, a lymphocyte-specific member of the Src family. By analyzing kinase-defective variants of p56^lck expressed in mouse NIH 3T3 cells, we have found that the noncatalytic Src homology 2 (SH2) domain, but not the SH3 sequence or the sites of Lck myristylation and autophosphorylation, is necessary for stable phosphorylation at the carboxy-terminal tyrosine 505. Further studies in which Lck and Csk were coexpressed in S. cerevisiae indicated that the absence of the SH2 domain did not affect the ability of Csk to phosphorylate p56^lck at tyrosine 505. However, we observed that incubation of cells with the tyrosine phosphatase inhibitor pervanadate restored the tyrosine 505 phosphorylation of Lck polypeptides devoid of the SH2 motif. Additionally, the presence of the SH2 sequence protected tyrosine 505 from in vitro dephosphorylation by the hemopoietic tyrosine protein phosphatase CD45. Taken together, these findings raised the possibility that the SH2 motif contributes to the physiological suppression of the catalytic function of p56^lck at least in part through its ability to stabilize phosphorylation at the inhibitory site.