The tyrosine kinase c-Src is upregulated in various human cancers irrespective of its negative regulator Csk, but the regulatory mechanisms remain unclear. Here, we show that a lipid raft-anchored Csk adaptor, Cbp/PAG, is directly involved in controlling the oncogenicity of c-Src. Using Csk-deficient cells that can be transformed by c-Src overexpression, we found that Cbp expression is markedly downregulated by c-Src activation and re-expression of Cbp efficiently suppresses c-Src transformation as well as tumorigenesis. Cbp-deficient cells are more susceptible to v-Src transformation than their parental cells. Upon phosphorylation, Cbp specifically binds to activated c-Src and sequesters it in lipid rafts, resulting in an efficient suppression of c-Src function independent of Csk. In some human cancer cells and tumors, Cbp is downregulated and the introduction of Cbp significantly suppresses tumorigenesis. These findings indicate a potential role for Cbp as a suppressor of c-Src-mediated tumor progression.