Despite years of investigation, the molecular mechanism responsible for regulation of the c-Abl tyrosine kinase has remained elusive. We now report inhibition of the catalytic activity of purified c-Abl in vitro, demonstrating that regulation is an intrinsic property of the molecule. We show that the interaction of the N-terminal 80 residues with the rest of the protein mediates autoregulation. This N-terminal “cap” is required to achieve and maintain inhibition, and its loss turns c-Abl into an oncogenic protein and contributes to deregulation of BCR-Abl.