The Src homology 2 (SH2) domain-containing protein Grb7 and the erbB2 receptor tyrosine kinase are overexpressed in a subset of human breast cancers. They also co-immunoprecipitate from cell lysates and associate directly in vitro. Whereas the Grb7 SH2 domain binds strongly to erbB2, the SH2 domain of Grb14, a protein closely related to Grb7, does not. We have investigated the preferred binding site of Grb7 within the erbB2 intracellular domain and the SH2 domain residues that determine the high affinity of Grb7 compared with Grb14 for this site. Phosphopeptide competition and site-directed mutagenesis revealed that Tyr-1139 of erbB2 is the major binding site for the Grb7 SH2 domain, indicating an overlap in binding specificity between the Grb7 and Grb2 SH2 domains. Substituting individual amino acids in the Grb14 SH2 domain with the corresponding residues from Grb7 demonstrated that a Gln to Leu change at the betaD6 position imparted high affinity erbB2 interaction, paralleled by a marked increase in affinity for the Tyr-1139 phosphopeptide. The reverse switch at the betaD6 position abrogated Grb7 binding to erbB2. This residue therefore represents an important determinant of SH2 domain specificity within the Grb7 family.