Csk (carboxyl-terminal Src kinase) is a cytoplasmic tyrosine kinase that phosphorylates a critical tyrosine residue in each of the Src family kinases (SFKs) to inhibit their activities. Recently, we identified a transmembrane protein, Cbp (Csk-binding protein), that, when phosphorylated, can recruit Csk to the membrane where the SFKs are located. The Cbp-mediated relocation of Csk to the membrane may play a role in turning off the signaling events initiated by SFKs. To further characterize the Csk-Cbp interaction, we have generated a reconstituted system using soluble, highly purified proteins. Csk and phosphorylated Cbp were co-purified as a large protein complex consisting of at least four Csk.Cbp units. The addition of the phosphorylated, but not nonphosphorylated, Cbp to an in vitro assay stimulated Csk activity toward Src. Csk was also activated by a phosphopeptide containing the tyrosine in Cbp that binds to Csk (Tyr-314). Kinetic analysis revealed that Cbp or the phosphopeptide induced up to a 6-fold reduction in the K(m) for Src, indicating that the Csk.Cbp complex has a greater affinity for Src than free Csk. These findings suggest that Cbp is involved in the regulation of SFKs not only by relocating Csk to the membrane but also by directly activating Csk.