The development of a sensitive fluorescence binding assay for evaluating the binding of phosphotyrosyl (pY) peptides to the recombinant SH2 domain of lck in solution is described. Several fluorescent peptides containing the consensus sequence of the viral hamster polyoma middle T antigen (pYEEI) were characterized. The peptides contained either the acetamido-anilino-naphthyl sulfonic acid (AANS), acrylodan, or dansyl groups as fluorophores. The spectral features of these probes were characterized in the presence and absence of the lck SH2 domain. The binding affinities (Kd) for the fluorescent peptides studied ranged from 40 to 500 nM. The fluorescent peptide containing the sequence FTATEC(AANS)QpYEEIP exhibited the highest binding affinity (Kd = 3.98 x 10(-8) M) and largest change in emission intensity (approximately 8.7-fold) upon binding the SH2 domain. This probe was subsequently used in competitive binding assays to study the interaction of the lck SH2 domain with a series of phosphopeptides related to the pYEEIP and pYQPQP (the pY505 C-terminal) consensus sequences. The effects of peptide length and substitutions of residues within the pYEEIP sequence are discussed in terms of binding affinities. Comparison between the two peptide series revealed that the contributions of individual substitutions to binding affinity are context-dependent. The data also led to the conclusion that the presence of P at +2 results in a functional "truncation" of the binding sequence; i.e., residues at positions higher than +2 do not participate significantly in binding. This implicit truncation may actually be a desired property for the autoregulatory nature of the pYQPQP sequence, since it retains specificity for the SH2 domain while adjusting the Kd to a value appropriate for maintaining the delicate balance of receptor-ligand interactions that are involved in signal transduction events.