Src homology 2 (SH2) domains play a critical role in cellular signal transduction. They bind to peptides containing phosphotyrosine (pY) with various specificities that depend on the flanking amino-acid residues. The SH2 domain of growth-factor receptor-bound protein 2 (Grb2) specifically recognizes pY-X-N-X, whereas the SH2 domains in phosphatidylinositol 3-kinase (PI3K) recognize pY-X-X-M. Binding of the pY site in CD28 (pY-M-N-M) by PI3K and Grb2 through their SH2 domains is a key step that triggers the CD28 signal transduction for T cell activation and differentiation. In this study, we determined the crystal structure of the Grb2 SH2 domain in complex with a pY-containing peptide derived from CD28 at 1.35 Å resolution. The peptide was found to adopt a twisted U-type conformation, similar to, but distinct from type-I β-turn. In all previously reported crystal structures, the peptide bound to the Grb2 SH2 domains adopts a type-I β-turn conformation, except those with a proline residue at the pY+3 position. Molecular modeling also suggests that the same peptide bound to PI3K might adopt a very different conformation.