Our previous studies have suggested that the α1 Na/K-ATPase interacts with Src to form a receptor complex. In vitro binding assays indicate an interaction between second cytosolic domain (CD2) of Na/K-ATPase α1 subunit and Src SH2 domain. Since SH2 domain targets Src to specific signaling complexes, we expressed CD2 as a cytosolic protein and studied whether it could act as a Src SH2 ligand in LLC-PK1 cells. Co-immunoprecipitation analyses indicated a direct binding of CD2 to Src, consistent with the in vitro binding data. Functionally, CD2 expression increased basal Src activity, suggesting a Src SH2 ligand-like property of CD2. Consistently, we found that CD2 expression attenuated several signaling pathways where Src plays an important role. For instance, although it increased surface expression of Na/K-ATPase, it decreased ouabain-induced activation of Src and ERK by blocking the formation of Na/K-ATPase/Src complex. Moreover, it also attenuated cell attachment-induced activation of Src/FAK. Consequently, CD2 delayed cell spreading, and inhibited cell proliferation. Furthermore, these effects appear to be Src-specific because CD2 expression had no effect on EGF-induced activation of EGF receptor and ERK. Hence, the new findings indicate the importance of Na/K-ATPase/Src interaction in ouabain-induced signal transduction, and support the proposition that the CD2 peptide may be utilized as a Src SH2 ligand capable of blocking Src-dependent signaling pathways via a different mechanism from a general Src kinase inhibitor.