During solution structural studies it was apparent that the human recombinant pp60c-src SH2 domain (srcSH2, residues 144-249) possessed an inherent phosphatase (Pase) activity. Complexes of U[13C,15N]srcSH2 with unlabeled Ac-pYEEIE (I) were examined using 31P and 1H-detected isotope filtered NMR methods. The presence of a high-affinity complex in equimolar solutions of I and U[13C, 15N]-srcSH2 was demonstrated by chemical shift perturbations, line broadening, and the observation of intermolecular nuclear Overhauser effects from the pY and Ile side-chain protons of I to protons on amino acid residues present in the binding pocket of srcSH2. Solutions containing excess I relative to srcSH2 revealed a slow hydrolysis of I to produce Ac-YEEIE and inorganic phosphate. The hydrolysis rate determined from NMR and HPLC-electrospray ionization mass spectrometry data at 30 degrees C for solutions containing excess I was 0.002-0.003 h-1. srcSH2 also catalyzed the hydrolysis of p-nitrophenyl phosphate (pNPP). Isoelectric focusing gels of a number of mutant srcSH2s demonstrated that this activity comigrated with srcSH2. Km, kcat, and kcat/Km were 3.7 +/- 0.4 mM, 3.1 +/- 0.2 x 10(-2) min-1, and 8.4 +/- 0.4 M-1 min-1, respectively, toward pNPP. The C188A mutant of the srcSH2 domain displayed 15% of the activity displayed by wild-type srcSH2, demonstrating that this residue is not absolutely required for activity. Two additional mutations in the known pY binding site, R178K and R158K, also resulted in decreased pNPPase activity, suggesting that the activity resides in or near this site. The inhibitor profile and pH dependence suggest that this is a novel protein Pase activity.(ABSTRACT TRUNCATED AT 250 WORDS)