The SH2 domain of pp60(c-src) (Src), a nonreceptor tyrosine kinase, facilitates signal transduction in a number of cell types through binding to cognate phosphorylated protein sequences. Phosphotyrosine-containing peptides have been shown to bind to the Src SH2 domain with micromolar affinity. Guided by the X-ray crystal structure of a phosphorylated peptide bound to the Src SH2 domain, we have designed a de novo series of small molecule ligands that bind with affinity comparable to the parent phosphopeptide. An X-ray crystal structure of the Src SH2 domain bound with a nonpeptide analog from this series verifies interactions targeted in the molecular design. However, a unique mode of binding has been revealed for the P-site phenyl phosphate group of the nonpeptide that differs from that observed for the phosphotyrosine side chain in peptide ligands bound to the Src SH2 domain. This novel binding mode is being used in guiding future design efforts.