To further our understanding of the molecular mechanism of Bcr-Abl mediated transformation, a yeast two hybrid screen was used to identify proteins binding to the Abl tyrosine kinase. Two partial cDNAs encoding novel SH2 domain-containing proteins were cloned and designated Shd and She. Both have homology to Shb, a previously reported SH2 domain-containing protein. Northern blot analysis showed that She is expressed in heart, lung, brain, and skeletal muscle, while expression of Shd is restricted to the brain. The deduced amino acid sequence of the full length mouse Shd cDNA contains an amino-terminal proline-rich region, and a carboxyterminal SH2 domain. A bacterially expressed Shd domain bound multiple tyrosine-phosphorylated proteins with relative molecular weights of 200, 170, 130, 100, 90, 78, 72 and 32 kDa from K562 cell lysates. Shd contains five YXXP motifs, a substrate sequence preferred by Abl tyrosine kinases. Shd was tyrosine phosphorylated in COS-7 cells co-transfected with Shd and c-Abl or Bcr-Abl. These results suggest that Shd may be a physiological substrate of c-Abl and may function as an adapter protein in the central nervous system.