Modular PDZ domains, found in many cell junction-associated proteins, mediate the clustering of membrane ion channels by binding to their C-terminus. The X-ray crystallographic structures of the third PDZ domain from the synaptic protein PSD-95 in complex with and in the absence of its peptide ligand have been determined at 1.8 angstroms and 2.3 angstroms resolution, respectively. The structures reveal that a four-residue C-terminal stretch (X-Thr/Ser-X-Val-COO(-)) engages the PDZ domain through antiparallel main chain interactions with a beta sheet of the domain. Recognition of the terminal carboxylate group of the peptide is conferred by a cradle of main chain amides provided by a Gly-Leu-Gly-Phe loop as well as by an arginine side chain. Specific side chain interactions and a prominent hydrophobic pocket explain the selective recognition of the C-terminal consensus sequence.