The Cbl protooncogene product has emerged as a novel negative regulator of receptor and non-receptor tyrosine kinases through currently undefined mechanisms. Therefore, determining how Cbl physically interacts with tyrosine kinases is of substantial interest. We recently identified a phosphotyrosine binding (PTB) domain residing within the N-terminal transforming region of Cbl (Cbl-N), which mediated direct binding to ZAP-70 tyrosine kinase. Here, we have screened a degenerate phosphopeptide library and show that the Cbl-PTB domain selects a D(N/D)XpY motif, reminiscent of but distinct from the NPXpY motif recognized by the PTB domains of Shc and IRS-1/2. A phosphopeptide predicted by this motif and corresponding to the in vivo negative regulatory phosphorylation site of ZAP-70 (Tyr(P)292) specifically inhibited binding of ZAP-70 to Cbl-N. A ZAP-70/Y292F mutant failed to bind to Cbl-N, whereas a D290A mutant resulted in a 64% decrease in binding, confirming the importance of the Tyr(P) and Y-2 residues in Cbl-PTB domain recognition. Finally the ZAP-70/Y292F mutant also failed to associate with Cbl-N or full-length Cbl in vivo. These results identify a potential Cbl-PTB domain-dependent role for Cbl in the negative regulation of ZAP-70 and predict potential Cbl-PTB domain binding sites on other protein tyrosine kinases known to interact with Cbl.