The Src-SH2 domain has been determined to play a key role in many signaling pathways, especially in osteoclast-mediated bone resorption. Therefore, non-peptidic small molecules, mimicking the natural pYEEI peptide ligand, have been designed, to inhibit SH2-mediated protein-protein interactions and provide therapeutic treatment of certain diseases such as osteoporosis. However it has been shown in vitro that phosphopeptidic ligands of the SH2 domain are able to increase Src kinase activity by disrupting the intramolecular interactions between the Tyr(521)-phosphorylated C-terminal tail and the SH2 domain, thereby inducing a change from a "closed" inactive to an "open" active conformation of Src. Thus it was not clear whether non-peptidic ligands would limit their action to the inhibition of the signaling cascade by interfering with the intermolecular SH2 binding, or would activate the enzyme as do phosphopeptides. To address this question we have investigated the effects of a series of both peptidic and non-peptidic ligands of the SH2 domain on Src kinase activation, both in vitro in an ELISA based assay and in vivo using csk and src double transformed Schizosaccharomyces pombe. We found that, in the peptide series, the extent of c-Src activation is directly correlated to the respective binding affinity for Src-SH2. By contrast such correlation is not valid for non-peptidic ligands, some high-affinity SH2 binders showing no detectable Src activation in vivo. These results have significant implications for the design of SH2 binders, as they allow a way to inhibit Src-SH2-mediated signal transduction in target cells, without activating Src in non-target cells, thereby reducing the possibility of side effects.