Recruitment of cellular signaling proteins by the CD3 polypeptides of the TCR complex mediates T cell activation. We have screened a human Src homology 3 (SH3) domain phage display library for proteins that can bind to the proline-rich region of CD3epsilon. This screening identified Eps8L1 (epidermal growth factor receptor pathway substrate 8-like 1) together with the N-terminal SH3 domain of Nck1 and Nck2 as its preferred SH3 partners. Studies with recombinant proteins confirmed strong binding of CD3epsilon to Eps8L1 and Nck SH3 domains. CD3epsilon bound well also to Eps8 and Eps8L3, and modestly to Eps8L2, but not detectably to other SH3 domains tested. Interestingly, binding of Nck and Eps8L1 SH3 domains was mapped to a PxxDY motif that shared its tyrosine residue (Y166) with the ITAM of CD3epsilon. Phosphorylation of this residue abolished binding of Eps/Nck SH3 domains in peptide spot filter assays, as well as in cells cotransfected with a dominantly active Lck kinase. TCR ligation-induced binding and phosphorylation-dependent loss of binding were also demonstrated between Eps8L1 and endogenous CD3epsilon in Jurkat T cells. Thus, phosphorylation of Y166 serves as a molecular switch during T cell activation that determines the capacity of CD3epsilon to interact with either SH3 or SH2 domain-containing proteins.