Here, we report the identification and characterization of a novel tyrosine phosphorylation site in the carboxy-terminal Src Homology 3 (SH3) (SH3C) domain of the Crk adaptor protein. Y251 is located in the highly conserved RT loop structure of the SH3C, a region of Crk involved in the allosteric regulation of the Abl kinase. Exploiting kinase assays to show that Y251 is phosphorylated by Abl in vitro, we generated affinity-purified antisera against phosphorylated Y251 in Crk and showed that Abl induces phosphorylation at Y251 in vivo, and that the kinetics of phosphorylation at Y251 and the negative regulatory Y221 site in vitro are similar. Y251 on endogenous Crk was robustly phosphorylated in chronic myelogenous leukemia cell lines and in A431 and MDA-MB-468 cells stimulated with epidermal growth factor. Using streptavidin-biotin pull downs and unbiased high-throughput Src Homology 2 (SH2) profiling approaches, we found that a pY251 phosphopeptide binds specifically to a subset of SH2 domains, including Abl and Arg SH2, and that binding of pY251 to Abl SH2 induces transactivation of Abl 1b. Finally, the Y251F Crk mutant significantly abrogates Abl transactivation in vitro and in vivo. These studies point to a yet unrealized positive regulatory role resulting from tyrosine phosphorylation of Crk, and identify a novel mechanism by which an adaptor protein activates a non-receptor tyrosine kinase by SH2 domain displacement.