The Bcr-Abl oncoprotein is the primary causative factor in Philadelphia chromosome-associated leukemias. The activated tyrosine kinase of the Bcr-Abl oncoprotein is the primary driving force behind its oncogenic activity. We report here that a deleted form of Bcr [Bcr(64-413)], encompassing the Abl SH2 binding domains of Bcr, reduced the phosphotyrosine content of c-Abl and Bcr-Abl within cells and inhibited Bcr-Abl autophosphorylation activity in vitro. Similarly, a Bcr peptide phosphorylated on Ser-354 blocked the c-Abl and Bcr-Abl kinases in vitro, whereas the same peptide phosphorylated on Tyr-360 was not inhibitory. Bcr(64-413) was also resistant to tyrosine phosphorylation by either activated c-Abl or Bcr-Abl. Importantly, Bcr(64-413) interfered with the growth of Bcr-Abl-expressing cell lines. Our findings indicate that the Abl SH2 binding domain of Bcr in the phosphoserine form inhibits the Bcr-Abl oncoprotein but that tyrosine phosphorylation of this domain of Bcr reverses its inhibitory effects on Bcr-Abl. These results raise interesting questions about a possible role of Bcr or a Bcr-related molecule in modulating the activity of the Bcr-Abl oncoprotein and c-Abl itself.