Phosphotyrosine (pY) signaling is instrumental to numerous cellular processes. pY recognition occurs through specialized protein modules, among which the Src-homology 2 (SH2) domain is the most common. SH2 domains are small protein modules with an invariant fold, and are present in more than a hundred proteins with different function. Here we ask the question of how such a structurally conserved, small protein domain can recognize distinct phosphopeptides with the breath of binding affinity, specificity and kinetic parameters necessary for proper control of pY-dependent signaling and rapid cellular response. We review the current knowledge on structure, thermodynamics and kinetics of SH2–phosphopeptide complexes and conclude that selective phosphopeptide recognition is governed by both structure and dynamics of the SH2 domain, as well as by the kinetics of the binding events. Further studies on the thermodynamic and kinetic properties of SH2–phosphopeptide complexes, beyond their structure, are required to understand signaling regulation. © 2020