Engagement of antigen receptor complexes induces rapid activation of Src-family kinases and association with phosphatidylinositol-3' kinase (PI-3 kinase). Here it was found that the Src homology 3 (SH3) domain of Lyn and Fyn bound to a proline-rich region (residues 84 to 99) within the 85-kilodalton subunit (p85) of PI-3 kinase. The binding of SH3 to the purified kinase led to a five- to sevenfold increase in the specific activity of PI-3 kinase. Ligand-induced receptor stimulation activated PI-3 kinase, and this activation was blocked by a peptide containing residues 84 to 99 of p85. These data demonstrate a mechanism for PI-3 kinase activation and show that binding of SH3 domains to proline-rich target sequences can regulate enzymatic activity.