Numerous mutations in the adenomatous polyposis coli (APC) gene have been described in colorectal cancer. The vast majority introduce nonsense codons leading to the production of truncated N-terminal APC fragments. Mutations occurring before APC codon 158, have been associated with an attenuated form of familial adenomatous polyposis whereas those occurring at codon 168 or beyond lead to the characteristic form of the disease. These 10 amino acid residues of APC contain a YYAQ motif which appears to constitute a potential SH2 binding domain similar to a sequence present in tyrosine kinase receptors that activate STAT 3 when phosphorylated. We have expressed a recombinant, N-terminal APC fragment in bacterial cells, and shown that it can indeed undergo tyrosine phosphorylation in this domain. We used site-directed mutagenesis to confirm the specificity of the reaction. These observations raise the possibility that tyrosine phosphorylation may be another mechanism involved in controlling APC function.