Ligand-activated and tyrosine-phosphorylated ErbB3 receptor binds to the SH2 domain of the p85 subunit of phosphatidylinositol 3-kinase and initiates intracellular signaling. Here, we studied the interactions between the N-(N-SH2) and C-(C-SH2) terminal SH2 domains of the p85 subunit of the phosphatidylinositol 3-kinase and eight ErbB3 receptor-derived phosphotyrosyl peptides (P-peptides) by using molecular dynamics, free energy, and surface plasmon resonance (SPR) analyses. In SPR analysis, these P-peptides showed no binding to the C-SH2 domain, but P-peptides containing a phospho-YXXM or a non-phospho-YXXM motif did bind to the N-SH2 domain. The N-SH2 domain has two phosphotyrosine binding sites in its N-(N1) and C-(N2) terminal regions. Interestingly, we found that P-peptides of pY1180 and pY1241 favored to bind to the N2 site, although all other P-peptides showed favorable binding to the N1 site. Remarkably, two phosphotyrosines, pY1178 and pY1243, which are just 63 amino acids apart from the pY1241 and pY1180, respectively, showed favorable binding to the N1 site. These findings indicate a possibility that the pair of phosphotyrosines, pY1178-pY1241 or pY1243-pY1180, will fold into an appropriate configuration for binding to the N1 and N2 sites simultaneously. Our model structures of the cytoplasmic C-terminal domain of ErbB3 receptor also strongly supported the speculation. The calculated binding free energies between the N-SH2 domain and P-peptides showed excellent qualitative agreement with SPR data with a correlation coefficient of 0.91. The total electrostatic solvation energy between the N-SH2 domain and P-peptide was the dominant factor for its binding affinity.Overexpression or mutation of ErbB receptors (ErbB1; epidermal growth factor receptor, ErbB2; Neu, ErbB3, and ErbB4) is implicated as a cause of various human cancers (1-4). ErbB3 is a kinase-impaired receptor; nevertheless ligand binding to the receptor can cause heterodimerization with another ErbB receptor and induces activation and transphosphorylation of the ErbB3 receptor in cells (5-7). Once activated and tyrosinephosphorylated, the ErbB3 binds to the Src homology 2 (SH2) 1 domain of p85 (a regulatory subunit of phosphatidylinositol 3-kinase (PI3K)) at its binding sites within the C-terminal regulatory region. Six binding sites have been identified for p85 binding; accordingly the ErbB3 receptor is considered as a scaffold protein for PI3K (2, 4, 8 -9). Studies on insulin receptor substrate-1 (IRS-1) (10 -12), platelet-derived growth factor receptor (13), and ErbB receptors (4, 8) revealed that the phospho-YXXM (pYXXM) motif is a specific binding site for SH2 domain of the p85, to which binding is necessary for activation of the p110 catalytic subunit of PI3K (12,14). On the other hand, the p85 is reported to bind to a pYVXV motif in the hepatocyte growth factor receptor (15), and another study also suggested that there was no binding specificity in any binding motifs for SH2 domains of p85, PLC␥, RasGAP, and Shc (16).The p85 has a tand...