Human decay accelerating factor (hDAF, CD55) and members of the carcinoembryonic-antigen-related cell-adhesion molecules (hCEACAMs) family are recognized as receptors by Gram-negative, diffusely adhering Escherichia coli (DAEC) strains expressing Afa/Dr adhesins. We report here that hCEACAM1-4L has a key function in downregulating the protein tyrosine Src kinase associated with hDAF signalling. After infecting HeLa epithelial cells stably transfected with hCEACAM1-4L cDNA with Dr adhesin-positive E. coli, the amount of the pTyr(416)-active form of the Src protein decreased, whereas that of the pTyr(527)-inactive form of Src protein did not increase. This downregulation of the Src protein implies that part of the hCEACAM1-4L protein had been translocated into lipid rafts, the protein was phosphorylated at Tyr residues in the cytoplasmic domain, and it was physically associated with the protein tyrosine phosphatase, SHP-2. Finally, we found that the hCEACAM1-4L-associated SHP-2 was not phosphorylated and lacked phosphatase activity, suggesting that the downregulation of Src protein associated with hDAF signalling results from the absence of dephosphorylation of the pTyr(527)-inactive form necessary for Src kinase activation.