p56lck is a member of the src family of tyrosine kinases. Through modular binding units called SH2 domains, p56lck promotes phosphotyrosine-dependent protein-protein interactions and plays a critical role in signal transduction events that lead to T-cell activation. Starting from the phosphorylated dipeptide (2), a high-affinity ligand for the p56lck SH2 domain, we have designed novel dipeptides that contain monocharged, nonhydrolyzable phosphate group replacements and bind to the protein with KD's in the low micromolar range. Replacement of the phosphate group in phosphotyrosine-containing sequences by a (R/S)-hydroxyacetic (compound 8) or an oxamic acid (compound 10) moiety leads to hydrolytically stable, monocharged ligands, with 83- and 233-fold decreases in potency, respectively. This loss in binding affinity can be partially compensated for by incorporating large lipophilic groups at the inhibitor N-terminus. These groups provide up to 13-fold increases in potency depending on the nature of the phosphate replacement. The discovery of potent (2-3 microM), hydrolytically stable dipeptide derivatives, bearing only two charges at physiological pH, represents a significant step toward the discovery of compounds with cellular activity and the development of novel therapeutics for conditions associated with undesired T-cell proliferation.