The tyrosine-based activation motif is a 20- to 25-amino-acid sequence contained in the cytoplasmic domains of many hematopoietic receptors which is sufficient by itself to reconstitute signalling. This motif is characterized by two YXXL/I sequences separated by approximately 10 residues. The molecular basis of signalling by this motif is unknown. Here we demonstrate that the tyrosine-based activation motif is required and sufficient for association with the tyrosine kinases p59fyn and ZAP-70, suggesting that association with these kinases is a general feature of this motif. Focusing on the single activation motif present in epsilon, we analyzed which residues of the motif were critical for binding of p59fyn and ZAP-70. Surprisingly, we found that no single mutation of any residue of epsilon resulted in the loss of p59fyn association. In contrast, single mutations at five residues of the epsilon activating motif abrogated ZAP-70 binding. Both of the tyrosines and the leucine or isoleucine residues that follow them were critical. The spacing between the tyrosines was also important, as deletion of two residues disrupted binding of ZAP-70, although p59fyn binding was not disrupted. Most of the defined features of the tyrosine activation motif are therefore requirements for ZAP-70 binding. Interestingly, the interaction of ZAP-70 with the motif was dependent on the presence of both ZAP-70 SH2 domains and both of the tyrosine residues in the motif, suggesting that ZAP-70 interacts with two phosphotyrosine residues and that the binding of the two SH2 domains is cooperative. In addition, we demonstrate that the interaction between the tyrosine activation motif is direct and requires prior tyrosine phosphorylation of the motif. We propose that the activation of cells by the tyrosine activating motif occurs in four discrete steps: binding of p59fyn, phosphorylation of the motif, binding of ZAP-70, and activation of ZAP-70 kinase activity.