Mutations in the Caenorhabditis elegans gene sem-5 affect cell signaling processes involved in guiding a class of cell migrations and inducing vulval cell fates. The sem-5 sequence encodes a protein comprised almost exclusively of SH2 and SH3 domains (SH, src homology region) that are found together in many signaling proteins and nonreceptor tyrosine kinases. A human protein, GRB2, was identified by its ability to associate with the activated human epidermal growth factor receptor (hEGFR). The GRB2 and Sem-5 proteins share an identical architecture of their SH2 and SH3 domains and 58% amino acid sequence identity. Here we demonstrate that GRB2 and a Drosophila sem-5-like gene Drk can specifically rescue sem-5 mutants. We also show that Sem-5, like GRB2, can bind to the activated hEGFR in vitro. We further correlate the abilities of several mutant variants of GRB2 and Sem-5 to bind to the hEGFR in vitro with their abilities to functionally replace sem-5 in vivo. These data indicate that GRB2 and Drk are functional homologues of Sem-5 and demonstrate the high degree of conservation of both structure and function between signaling systems throughout evolution.