Src family kinases are suppressed by a ‘tail-bite’ mechanism, in which the binding of a phosphorylated tyrosine in the C-terminus of the protein to the Src homology (SH) 2 domain in the N-terminal half of the protein forces the catalytic domain into an inactive conformation stabilized by an additional SH3 interaction. In addition to this intramolecular suppressive function, the SH2 domain also mediates intermolecular interactions, which are crucial for T cell antigen receptor (TCR) signaling. To better understand the relative importance of these two opposite functions of the SH2 domain of the Src family kinase Lck in TCR signaling, we created three mutants of Lck in which the intramolecular binding of the C-terminus to the SH2 domain was strengthened. The mutants differed from wild-type Lck only in one to three amino acid residues following the negative regulatory tyrosine 505, which was normally phosphorylated by Csk and dephosphorylated by CD45 in the mutants. In the Lck-negative JCaM1 cell line, the Lck mutants had a much reduced ability to transduce signals from the TCR in a manner that directly correlated with SH2 - phospho-Y505 affinity. The mutant with the strongest ‘tail-bite’ was completely unable to support any ZAP-70 phosphorylation, overall tyrosine phosphorylation, or MAP kinase activation in response to TCR ligation, while other mutants had intermediate abilities. Lipid raft targeting was not affected. We conclude that Lck is regulated by a weak ‘tail-bite’ to allow for its activation and service in TCR signaling, perhaps through a competitive SH2 engagement mechanism.