Src-family tyrosine kinases act as signaling molecules in a wide array of cellular activation processes. The existence of the various src-family members reflects the requirement for different cell-surface receptors to transmit cell-type specific intracellular signals. The structural basis for the functional specificity of src-kinases is being actively investigated. In the present report we have analysed the contribution of the area surrounding the autophosphorylation site (located at subdomain VII of the catalytic domain) in determining src-kinases activity and functional specificity. To this end we analysed the kinase activities of the lymphoid src-kinase pp56lck and a mutant of pp56lck in which this region has been exchanged for the corresponding area of the serine/threonine kinase c-Raf. Our studies indicate that the change at subdomain VII affected the ability of pp56lck to phosphorylate physiological substrates. Furthermore, when analysed in T cells, the mutant at subdomain VII failed to induce interleukin-2 production, a specific biological function of pp56lck. Thus, the area surrounding the autophosphorylation site of pp56lck plays a critical role in mediating its specific biological function.