The transforming protein of Rous sarcoma virus, pp60(v-src), and its normal cellular homolog, pp60(c-src), differ not only in oncogenic potential but also in their subcellular localization and cytoskeletal binding ability. pp60(v-src) has been shown to stably associate with a detergent-insoluble cytoskeletal matrix, whereas pp60(c-src) does not. We have generated a series of precise deletion and truncations of the Src homology domains within pp60(v-src) and pp60(c-src), based on the crystal and solution structures of these regions, to determine not only the region responsible for cytoskeletal association but also the mechanism accounting for the differential binding observed. Here we show that the SH2 domain, but not the SH3 domain, mediates cytoskeletal association of pp60(v-src) through a phosphotyrosine-dependent interaction. The ability to interact with the cytoskeletal matrix is regulated by the catalytic (SH1) domain. Truncation of the pp60(v-src) catalytic domain results in lower binding while removal of the catalytic domain of pp60(c-src) results in the acquisition of cytoskeletal binding similar to that of the analogous v-src construct. These results indicate that the SH2 and catalytic domains function coordinately to regulate the cytoskeletal association of pp60(v-src) and pp60(c-src).