The signal transduction protein phospholipase C-gamma1 (PLC-gamma1) is activated when its C-terminal SH2 domain (PLCC) binds the phosphorylated Tyr-1021 site (pTyr-1021) in the beta-platelet-derived growth factor receptor (PDGFR). To better understand the contributions that dynamics make to binding, we have used NMR relaxation experiments to investigate the motional properties of backbone amide and side chain methyl groups in a peptide derived from the pTyr-1021 site of PDGFR, both free and in complex with the PLCC SH2 domain. The free peptide has relaxation properties that are typical for a small, unstructured polymer, while the backbone of the bound peptide is least flexible for residues in the central portion of the binding site with the amplitude of pico- to nanosecond time scale motions increasing toward the C-terminus of the peptide. The increase in large amplitude motion toward the end of the pY1021 peptide is consistent with the bound peptide existing as an ensemble of states with C-terminal residues having the broadest distribution of backbone conformations, while residues in the central binding site are the most restricted. Deuterium spin relaxation experiments establish that the protein-peptide interface is highly dynamic, and this mobility may play an important role in modulating the affinity of the interaction.