Lyn is a member of the Src family of protein-tyrosine kinases that can readily undergo autophosphorylation in vitro. The site of autophosphorylation is Tyr 397 which corresponds to the consensus autophosphorylation site of other Src family tyrosine kinases. The rate of autophosphorylation is concentration-dependent, indicating that the reaction follows an intermolecular mechanism. Autophosphorylation results in a 17-fold increase in protein-tyrosine kinase activity. Kinetic analysis demonstrates that phosphorylation of a substrate peptide by Lyn following autophosphorylation occurs with a 63-fold decrease in K(m) but no significant change in V(max), suggesting that autophosphorylation relieves the conformational constraint that prevents binding of the substrate peptide to the active site of the kinase. Using a phosphotyrosine-containing peptide (pYEEI) that has previously been shown to bind to the Src homology 2 (SH2) domain of Src family tyrosine kinases with high affinity, we found that autophosphorylation results in a significant decrease in accessibility of the Lyn SH2 domain, indicating that conformational changes in the protein kinase domain induced by autophosphorylation can be propagated to the SH2 domain. Our study suggests that autophosphorylation plays an important role in regulating Lyn by modulating both its kinase activity and its interaction with other phosphotyrosine-containing molecules.