FOCAL adhesion kinase(1,2) (pp125(FAK)) is a member of a growing family of structurally distinct protein tyrosine kinases that includes the recently identified FakB(3) and PYK2/CAK beta/RAFTK(4,6). Activation of pp125(FAK) has been functionally linked to the formation of focal adhesions, integrin-mediated sites of contact between the cell and the extracellular matrix(7,8). The carboxy-terminal domain of pp125(FAK) is also expressed as a separate protein called pp41/43(FRNK) (where FRNK represents pp125(FAK)-related non-kinase)(9). Here we show that pp41/43(FRNK) acts as an inhibitor of pp125(FAK) by transiently blocking the formation of focal adhesions on fibronectin and constitutively reducing tyrosine phosphorylation of both pp125(FAK) and of two focal adhesion proteins, tensin and paxillin. These inhibitory effects of pp41/43(FRNK) are reversed by co-expression of pp125(FAK), suggesting that pp125(FAK) and pp41/43(FRNK) compete for a common binding protein(s) whose association with pp125(FAK) is necessary for signalling by pp125(FAK). We propose that pp41/43F RNK functions as an endogenous regulator of pp125(FAK), thus providing an unusual means to regulate both tyrosine kinase activity and cellular adhesion to the extracellular matrix.