Fe65L1, a member of the Fe65 family, is an adaptor protein that interacts with the cytoplasmic domain of Alzheimer amyloid precursor protein (APP) through its C-terminal phosphotyrosine interaction/phosphotyrosine binding (PID/PTB) domain. In the present study, the solution structures of the C-terminal PID domain of mouse Fe65L1, alone and in complex with a 32-mer peptide (DAAVTPEERHLSKMQQNGYENPTYKFFEQMQN) derived from the cytoplasmic domain of APP, were determined using NMR spectroscopy. The C-terminal PID domain of Fe65L1 alone exhibits a canonical PID/PTB fold, whereas the complex structure reveals a novel mode of peptide binding. In the complex structure, the NPTY motif forms a type-I beta-turn, and the residues immediately N-terminal to the NPTY motif form an antiparallel beta-sheet with the beta5 strand of the PID domain, the binding mode typically observed in the PID/PTB.peptide complex. On the other hand, the N-terminal region of the peptide forms a 2.5-turn alpha-helix and interacts extensively with the C-terminal alpha-helix and the peripheral regions of the PID domain, representing a novel mode of peptide binding that has not been reported previously for the PID/PTB.peptide complex. The indispensability of the N-terminal region of the peptide for the high affinity of the PID-peptide interaction is consistent with NMR titration and isothermal calorimetry data. The extensive binding features of the PID domain of Fe65L1 with the cytoplasmic domain of APP provide a framework for further understanding of the function, trafficking, and processing of APP modulated by adapter proteins.