The phosphorylation of protein tyrosine kinases (PTKs) on tyrosine residues is a critical regulatory event that modulates catalytic activity and triggers the physical association of PTKs with Src homology 2 (SH2)-containing proteins. The integrin-linked focal adhesion kinase, ppl25 FAK, exhibits extracellular matrix-dependent phosphorylation on tyrosine and physically associates with two nonreceptor PTKs, pp60 src and pp59 fyn, via their SH2 domains. Herein, we identify Tyr-397 as the major site of tyrosine phosphorylation on ppl25 FAK both in vivo and in vitro. Tyrosine 397 is located at the juncture of the N-terminal and catalytic domains, a novel site for PTK autophosphorylation. Mutation of Tyr-397 to a nonphosphorylatable residue dramatically impairs the phosphorylation of ppl25 FAK on tyrosine in vivo and in vitro. The mutation of Tyr-397 to Phe also inhibits the formation of stable complexes with pp60 src in cells expressing Src and FAK 397F, suggesting that autophosphorylation of ppl25 FAK may regulate the association of ppl25 FAK with Src family kinases in vivo. The identification of Tyr-397 as a major site for FAK autophosphorylation provides one of the first examples of a cellular protein containing a high-affinity binding site for a Src family kinase SH2 domain. This finding has implications for models describing the mechanisms of action of ppl25 FAK, the regulation of the Src family of PTKs, and signal transduction through the integrins.