We have determined the thermodynamic stability and peptide binding affinity of the carboxy-terminal Src homology 3 (SH3) domain from the Caenorhabditis elegans signal-transduction protein Sem-5. Despite its small size (62 residues) and lack of disulfide bonds, this domain is highly stable to thermal denaturation - at pH 7.3, the protein has a T-m of 73.1 degrees C. Interestingly, the protein is not maximally stable at neutral pH, but reaches a maximum at around pH 4.7 (T-m congruent to 80 degrees C). Increasing ionic strength also stabilizes the protein, suggesting that 1 or more carboxylate ions are involved in a destabilizing electrostatic interaction. By guanidine hydrochloride denaturation, the protein is calculated to have a free energy of unfolding of 4.1 kcal/mol at 25 degrees C. We have also characterized binding of the domain to 2 different length proline-rich peptides from the guanine nucleotide exchange factor, Sos, one of Sem-5's likely physiological ligands in cytoplasmic signal transduction. Upon binding, these peptides cause about a 2-fold increase in fluorescence intensity. Both bind with only modest affinities (K-d congruent to 30 mu M), lower than some previous estimates for SH3 domains. By fluorescence, the domain also appears to associate with the homopolymer poly-L-proline in a similar fashion.