Protein-tyrosine kinases (PTKs) play pivotal roles in many cell systems. The Src family kinases (SFKs) are the most characterized PTKs shown to be coupled with various cell surface receptors. However, their mode of activation and regulating partners are largely unknown. Here we describe a novel mechanism of inhibition and activation of c-Src, a representative of the SFKs. Both directions of regulation take place at the same site in the catalytic domain of c-Src via a peptide- or protein-protein interaction. Our results highlight a novel and general mode of kinase regulation that may be applied not only to SFKs, but to other PTKs and Ser/Thr kinases as well.