C-terminal Src kinase (Csk) takes part in a highly specific, high affinity interaction via its Src homology 3 (SH3) domain with the proline-enriched tyrosine phosphatase PEP in hematopoietic cells. The solution structure of the Csk-SH3 domain in complex with a 25-residue peptide from the Pro/Glu/Ser/Thr-rich (PEST) domain of PEP reveals the basis for this specific peptide recognition motif involving an SH3 domain. Three residues, Ala 40, Thr 42 and Lys 43, in the SH3 domain of Csk specifically recognize two hydrophobic residues, Ile 625 and Val 626, in the proline-rich sequence of the PEST domain of PEP. These two residues are C-terminal to the conventional proline-rich SH3 domain recognition sequence of PEP. This interaction is required in addition to the classic polyproline helix (PPII) recognition by the Csk-SH3 domain for the association between Csk and PEP in vivo. NMR relaxation analysis suggests that Csk-SH3 has different dynamic properties in the various subsites important for peptide recognition.