The gastric pathogen Helicobacter pylori translocates the CagA protein into epithelial cells by a type IV secretion process. Translocated CagA is tyrosine phosphorylated (CagA P‐Tyr) on specific EPIYA sequence repeats by Src family tyrosine kinases. Phos phorylation of CagA induces the dephosphorylation of as yet unidentified cellular proteins, rearrangements of the host cell actin cytoskeleton and cell scattering. We show here that CagA P‐Tyr inhibits the catalytic activity of c‐Src in vivo and in vitro. c‐Src inactivation leads to tyrosine dephosphorylation of the actin binding protein cortactin. Concomitantly, cortactin is specifically redistributed to actin‐rich cellular protrusions. c‐Src inactivation and cortactin dephosphorylation are required for rearrangements of the actin cytoskeleton. Moreover, CagA P‐Tyr‐mediated c‐Src inhibition downregulates further CagA phosphorylation through a negative feedback loop. This is the first report of a bacterial virulence factor that inhibits signalling of a eukaryotic tyrosine kinase and on a role of c‐Src inactivation in host cell cytoskeletal rearrangements.