Fragment complementation has been used to delineate the essential recognition elements for stable folding in Src homology 2 (SH2) domains by using NMR spectroscopy, alanine scanning, and surface plasmon resonance. The unfolded 9-kD and 5-kD peptide fragments formed by limited proteolytic digestion of the N-terminal SH2 domain from the p85alpha subunit of phosphatidylinositol 3'-kinase fold into an active native-like structure on interaction with one another. The corresponding 5-kD fragment of the homologous Src protein, however, was not capable of structurally complementing the p85 9-kD fragment, indicating that fragment complementation among these SH2 domains is sensitive to the sequence differences between the Src and p85 domains. Partial complementation and folding activity could be recovered with hybrid sequences of these SH2 domains. Complete alanine scanning of the 5-kD p85 fragment was used to identify the sequence recognition elements required for complex formation. The alanine substitutions in the p85 5-kD fragment that abolished binding affinity with the cognate 9-kD fragment correlate well with highly conserved residues among SH2 domains that are either integrally involved in core packing or found at the interface between fragments. Surprisingly, however, mutation of a nonconserved surface-exposed aspartic acid to alanine was found to have a significant effect on complementation. A single additional mutation of arginine to aspartic acid allowed for recovery of native structure and increased the thermal stability of the designed Src-p85 chimera by 18 degrees C. This modification appears to relieve an unfavorable surface electrostatic interaction, demonstrating the importance of surface charge interactions in protein stability.