We previously proposed a model of Class IA PI3K regulation in which p85 inhibition of p110α requires ( i ) an inhibitory contact between the p85 nSH2 domain and the p110α helical domain, and ( ii ) a contact between the p85 nSH2 and iSH2 domains that orients the nSH2 so as to inhibit p110α. We proposed that oncogenic truncations of p85 fail to inhibit p110 due to a loss of the iSH2-nSH2 contact. However, we now find that within the context of a minimal regulatory fragment of p85 (the nSH2-iSH2 fragment, termed p85ni), the nSH2 domain rotates much more freely (τ c ≈12.7 ns) than it could if it were interacting rigidly with the iSH2 domain. These data are not compatible with our previous model. We therefore tested an alternative model in which oncogenic p85 truncations destabilize an interface between the p110α C2 domain (residue N345) and the p85 iSH2 domain (residues D560 and N564). p85ni-D560K/N564K shows reduced inhibition of p110α, similar to the truncated p85ni-572 STOP . Conversely, wild-type p85ni poorly inhibits p110αN345K. Strikingly, the p110αN345K mutant is inhibited to the same extent by the wild-type or truncated p85ni, suggesting that mutation of p110α-N345 is not additive with the p85ni-572 STOP mutation. Similarly, the D560K/N564K mutation is not additive with the p85ni-572 STOP mutant for downstream signaling or cellular transformation. Thus, our data suggests that mutations at the C2-iSH2 domain contact and truncations of the iSH2 domain, which are found in human tumors, both act by disrupting the C2-iSH2 domain interface.