Dab1 is an intracellular adaptor protein that interacts with amyloid precursor protein (APP) and apoE receptor 2 (apoEr2), increases their levels on the cell surface, and increases their cleavage by alpha-secretases. To investigate the mechanism underlying these alterations in processing and trafficking of APP and apoEr2, we examined the effect of Fyn, an Src family-tyrosine kinase known to interact with and phosphorylate Dab1. Co-immunoprecipitation, co-immunostaining, and fluorescence lifetime imaging demonstrated an association between Fyn and APP. Fyn induced phosphorylation of APP at Tyr-757 of the (757)YENPTY(762) motif and increased cell surface expression of APP. Overexpression of Fyn alone did not alter levels of sAPPalpha or cytoplasmic C-terminal fragments, although it significantly decreased production of Abeta. However, in the presence of Dab1, Fyn significantly increased sAPPalpha and C-terminal fragments. Fyn-induced APP phosphorylation and cell surface levels of APP were potentiated in the presence of Dab1. Fyn also induced phosphorylation of apoEr2 and increased its cell surface levels and, in the presence of Dab1, affected processing of its C-terminal fragment. In vivo studies showed that sAPPalpha was decreased in the Fyn knock-out, supporting a role for Fyn in APP processing. These data demonstrate that Fyn, due in part to its effects on Dab1, regulates the phosphorylation, trafficking, and processing of APP and apoEr2.