Membrane-associated guanylate kinases (MAGUKs) organize protein complexes at specific cellular sites by regulating interactions with their COOH-terminal guanylate kinase-like domains (GKs). Negative regulation of MAGUK GKs by an adjacent Src homology 3 domain (SH3) is critical for function, yet the mechanism is poorly understood. To gain insight into this process, we investigated SH3 regulation of the Discs large (Dlg) GK. Mutational analysis revealed that the binding site of the SH3-inhibited GK ligand GukHolder (GukH) is opposite the SH3 interacting surface, indicating that the SH3 does not directly occlude GukH binding. We screened for constitutively active SH3GK variants using yeast two-hybrid and a cell polarity/mitotic spindle orientation assay. Residues in both the SH3 and GK are required to maintain SH3GK inhibition, including those distant from both the SH3-GK and GK-GukH interaction sites. Activating mutations do not alter the ability of the SH3 and GK to interact in trans. On the basis of these observations, we propose that the SH3 modulates GK allostery to control its function.