In the mammalian brain the ubiquitous tyrosine kinase, C-Src, undergoes splicing to insert short sequences in the SH3 domain to yield N1- and N2-Src. We and others have previously shown that the N-Srcs have altered substrate specificity and kinase activity compared to C-Src. However, the exact functions of the N-Srcs are unknown and it is likely that N-Src signalling events have been misattributed to C-Src because they cannot be distinguished by conventional Src inhibitors that target the kinase domain. By screening a peptide phage display library, we discovered a novel ligand (PDN1) that targets the unique SH3 domain of N1-Src and inhibits N1-Src in cells. In cultured neurons, PDN1 fused to a fluorescent protein inhibited neurite outgrowth, an effect that was mimicked by shRNA targeting the N1-Src microexon. PDN1 also inhibited L1-CAM-dependent neurite elongation in cerebellar granule neurons, a pathway previously shown to be disrupted in Src-/- mice. PDN1 therefore represents a novel tool for distinguishing the functions of N1-Src and C-Src in neurons and is a starting point for the development of a small molecule inhibitor of N1-Src.