Focal adhesion kinase (FAK) mediates signal transduction in response to multiple extracellular inputs via tyrosine phosphorylation at specific residues. Although several tyrosine phosphorylation events have been linked to FAK activation and downstream signal transduction, the function of FAK phosphorylation at Tyr407 was previously unknown. Here, we show for the first time that phosphorylation of FAK Tyr407 increases during serum starvation, contact inhibition, and cell cycle arrest, all conditions under which activating FAK Tyr397 phosphorylation decreases. Transfection of NIH3T3 cells with a phosphorylation-mimicking FAK 407E mutant decreased autophosphorylation at Tyr397 and inhibited both FAK kinase activity in vitro and FAK-mediated functions such as cell adhesion, spreading, proliferation, and migration. The opposite effects were observed in cells transfected with nonphosphorylatable mutant FAK 407F. Taken together, these data suggest the novel concept that FAK Tyr407 phosphorylation negatively regulates the enzymatic and biological activities of FAK.