FOCAL adhesion kinase^1,2 (pp125^FAK) is a member of a growing family of structurally distinct protein tyrosine kinases that includes the recently identified FakB³ and PYK2/CAKβ/ RAFTK^4,6. Activation of pp125^FAK has been functionally linked to the formation of focal adhesions, integrin-mediated sites of contact between the cell and the extracellular matrix^7,8. The carboxy-terminal domain of pp125^FAK is also expressed as a separate protein called pp41/43^FRNK(where FRNK represents pp125^FAK-related non-kinase)⁹. Here we show that pp41/43^FRNK acts as an inhibitor of pp125^FAK by transiently blocking the formation of focal adhesions on fibronectin and constitutively reducing tyrosine phosphorylation of both pp125^FAK and of two focal adhesion proteins, tensin and paxillin. These inhibitory effects of pp41/43^FRNK are reversed by co-expression of pp!25FAK, suggesting that pp125^FAK and pp41/43^FRNK compete for a common binding protein(s) whose association with pp125^FAK is necessary for signalling by pp125^FAK. We propose that pp41/43^FRNK functions as an endogenous regulator of pp125^FAK, thus providing an unusual means to regulate both tyrosine kinase activity and cellular adhesion to the extracellular matrix.