Specific recognition of phosphotyrosine-containing protein segments by Src homology 2 (SH2) and phosphotyrosine-binding (PTB) domains plays an important role in intracellular signal transduction. Although many SH2/PTB-domain-containing receptor-peptide complex structures have been solved, little has been done to study the problem computationally. Prediction of the binding geometry and the binding constant of any peptide-protein pair is an extremely important problem. RESULTS: A procedure to predict binding energies of phosphotyrosine-containing peptides with SH2/PTB domains was developed. The average deviation between experimentally measured binding energies and theoretical evaluations was 1.8 kcal/mol. Binding states of unphosphorylated peptides were also predicted reasonably well. Ab initio predictions of binding geometry of fully flexible peptides correctly identified conformations of two pentapeptides and a hexapeptide complexed with a v-Src SH2 domain receptor with root mean square deviations (rmsds) of 0.3 A, 1.2 A and 1.5 A, respectively. CONCLUSIONS: The binding energies of phosphotyrosine-containing complexes can be effectively predicted using the procedure developed here. It was also possible to predict the bound conformations of flexible short peptides correctly from random starting conformations.