An improved understanding of the roles of protein kinases in intracellular signalling and disease progression has driven significant advances in protein kinase inhibitor discovery. Peptide inhibitors that target the kinase protein substrate-binding site have continued to attract attention. In the present paper, we describe a novel JNK (c-Jun N-terminal kinase) inhibitory peptide PYC71N, which inhibits JNK activity in vitro towards a range of recombinant protein substrates including the transcription factors c-Jun, ATF2 (activating trancription factor 2) and Elk1, and the microtubule regulatory protein DCX (doublecortin). Analysis of cell culture studies confirmed the actions of a cell-permeable version of PYC71 to inhibit c-Jun phosphorylation during acute hyperosmotic stress. The analysis of the in vitro data for the kinetics of this inhibition indicated a substrate–inhibitor complex-mediated inhibition of JNK by PYC71N. Alanine-scanning replacement studies revealed the importance of two residues (PYC71N Phe9 or Phe11 within an FXF motif) for JNK inhibition. The importance of these residues was confirmed through interaction studies showing that each change decreased interaction of the peptide with c-Jun. Furthermore, PYC71N interacted with both non-phosphorylated (inactive) JNK1 and the substrate c-Jun, but did not recognize active JNK1. In contrast, a previously characterized JNK-inhibitory peptide TIJIP [truncated inhibitory region of JIP (JNK-interacting protein)], showed stronger interaction with active JNK1. Competition binding analysis confirmed that PYC71N inhibited the interaction of c-Jun with JNK1. Taken together, the results of the present study define novel properties of the PYC71N peptide as well as differences from the characterized TIJIP, and highlight the value of these peptides to probe the biochemistry of JNK-mediated substrate interactions and phosphorylation.