The Eph receptor tyrosine kinases and their ligands, the ephrins, regulate numerous biological processes in developing and adult tissues and have been implicated in cancer progression and in pathological forms of angiogenesis. We report the crystal structure of the EphB4 receptor in complex with a highly specific antagonistic peptide at a resolution of 1.65 angstroms. The peptide is situated in a hydrophobic cleft of EphB4 corresponding to the cleft in EphB2 occupied by the ephrin-B2 G-H loop, consistent with its antagonistic properties. Structural analysis identifies several residues within the EphB4 binding cleft that likely determine the ligand specificity of this receptor, while isothermal titration calorimetry experiments with truncated forms of the peptide define the amino acid residues of the peptide that are critical for receptor binding. These studies reveal structural features that will aid drug discovery initiatives to develop EphB4 antagonists for therapeutic applications.