The epidermal growth factor receptor (EGFR) kinase catalyzes phosphorylation of tyrosines in its C terminus and in other cellular targets upon epidermal growth factor (EGF) stimulation. Here, by using peptides derived from EGFR autophosphorylation sites and cellular substrates, we tested the hypothesis that ligand may function to regulate EGFR kinase specificity by modulating the binding affinity of peptide sequences to the active site. Measurement of the steady-state kinetic parameters, K-m and k(cat), revealed that EGF did not affect the binding of EGFR peptides but increased the binding affinity for peptides corresponding to the major EGFR-mediated phosphorylation sites of the adaptor proteins Gab1 (Tyr-627) and Shc (Tyr-317), and for peptides containing the previously identified optimal EGFR kinase substrate sequence EEEEYFELV (3-7-fold). Conversely, EGF stimulation increased k(cat) similar to5-fold for all peptides. Thus, ligand changed the relative preference of the EGFR kinase for substrates as evidenced by EGF increases of similar to5-fold in the specificity constants (k(cat)/K-m) for EGFR peptides, whereas similar to 15 - 40-fold increases were observed for other peptides, such as Gab1 Tyr-627. Furthermore, we demonstrate that EGF (i) increased the binding affinity of EGFR to Gab1 Tyr-627 and Shc Tyr-317 sites in purified GST fusion proteins similar to 4-6-fold, and (ii) EGF significantly enhanced the phosphorylation of these sites, relative to EGFR autophosphorylation, in cell lysates containing the full-length Gab1 and Shc proteins. Analysis of peptides containing amino acid substitutions indicated that residues C-terminal to the target tyrosine were critical for EGF-stimulated increases in substrate binding and regulation of kinase specificity. To our knowledge, this represents the first demonstration that ligand can alter specificity of a receptor kinase toward physiologically relevant targets.