The protein deleted in liver cancer 1 (DLC1) interacts with the tensin family of focal adhesion proteins to play a role as a tumor suppressor in a wide spectrum of human cancers. This interaction has been proven to be crucial to the oncogenic inhibitory capacity and focal adhesion localization of DLC1. The phosphotyrosine binding (PTB) domain of tensin2 predominantly interacts with a novel site on DLC1, not the canonical NPXY motif. In this study, we characterized this interaction biochemically and determined the complex structure of tensin2 PTB domain with DLC1 peptide by NMR spectroscopy. Our HADDOCK-derived complex structure model elucidates the molecular mechanism by which tensin2 PTB domain recognizes DLC1 peptide and reveals a PTB-peptide binding mode that is unique in that peptide occupies the binding site opposite to the canonical NPXY motif interaction site with the peptide utilizing a non-canonical binding motif to bind in an extended conformation and that the N-terminal helix, which is unique to some Shc- and Dab-like PTB domains, is required for binding. Mutations of crucial residues defined for the PTB-DLC1 interaction affected the co-localization of DLC1 and tensin2 in cells and abolished DLC1-mediated growth suppression of hepatocellular carcinoma cells. This tensin2 PTB-DLC1 peptide complex with a novel binding mode extends the versatile binding repertoire of the PTB domains in mediating diverse cellular signaling pathways as well as provides a molecular and structural basis for better understanding the tumor-suppressive activity of DLC1 and tensin2.