Ligand-activated and tyrosine-phosphorylated ErbB3 receptor binds to the SH2 domain of the p85 subunit of phosphatidylinositol 3-kinase and initiates intracellular signaling. Here, we studied the interactions between the N- (N-SH2) and C- (C-SH2) terminal SH2 domains of the p85 subunit of the phosphatidylinositol 3-kinase and eight ErbB3 receptor-derived phosphotyrosyl peptides (P-peptides) by using molecular dynamics, free energy, and surface plasmon resonance (SPR) analyses. In SPR analysis, these P-peptides showed no binding to the C-SH2 domain, but P-peptides containing a phospho-YXXM or a non-phospho-YXXM motif did bind to the N- SH2 domain. The N- SH2 domain has two phosphotyrosine binding sites in its N- (N1) and C- (N2) terminal regions. Interestingly, we found that P-peptides of pY1180 and pY1241 favored to bind to the N2 site, although all other P-peptides showed favorable binding to the N1 site. Remarkably, two phosphotyrosines, pY1178 and pY1243, which are just 63 amino acids apart from the pY1241 and pY1180, respectively, showed favorable binding to the N1 site. These findings indicate a possibility that the pair of phosphotyrosines, pY1178-pY1241 or pY1243-pY1180, will fold into an appropriate configuration for binding to the N1 and N2 sites simultaneously. Our model structures of the cytoplasmic C- terminal domain of ErbB3 receptor also strongly supported the speculation. The calculated binding free energies between the N- SH2 domain and P-peptides showed excellent qualitative agreement with SPR data with a correlation coefficient of 0.91. The total electrostatic solvation energy between the N- SH2 domain and P-peptide was the dominant factor for its binding affinity.