Multifunctional proteins frequently can be subdivided into discrete functional domains. Selected cytoplasmic proteins involved in signal transduction contain catalytic domains in addition to protein binding modules termed Src homology (SH) domains; SH2 domains bind phosphotyrosyl peptide sequences. Even as isolated modules, SH2 domains have the intrinsic capacity to fold properly and retain sequence selectivity for binding. Following limited digestion with trypsin, the 14-kDa SH2 domains of Src and PI 3-kinase p85 were split at a lysine within the flexible, phosphotyrosine-binding (BC) loop into 5- and 9-kDa fragments. Whereas the purified fragments did not exhibit cooperative unfolding or phosphopeptide binding, when combined they spontaneously reassembled to restore specific phosphopeptide binding and the unique spectroscopic signatures of bound and free intact SH2 domains. Like fragments of intact proteins, we now show that fragments of SH2 domains, and therefore protein modules, possess the intrinsic capacity for self-assembly with restoration of function. Analyses of fragment structures may provide insights into pathways of module folding, which will facilitate a more global understanding of how complex, multifunctional proteins fold.