Focal adhesion kinase (FAK) is upregulated in several epithelial tumours and there has been considerable interest in developing small molecule kinase inhibitors of FAK. However, FAK also has important adaptor functions within the cell, integrating signals from both integrins and growth factors. To investigate the role of FAKs kinase domain we generated fak-deficient squamous cell carcinoma (SCC) cell lines. Re-expression of a wild type or kinase dead FAK allowed us to delineate its kinase dependent functions. In addition we used the novel FAK kinase inhibitor PF-562,271. The kinase activity of FAK was important for tumour cell migration and polarity but more striking was its requirement for the anchorage independent 3 dimensional (3D) proliferation of SCC cells and their growth as xenografts in mice. Inhibition of FAK activity and prevention of growth in 3D correlated with Src inhibition. We further identified a mechanism whereby FAK regulates proliferation in 3D via regulation of the kinase activity of Src. This was dependent on the kinase activity of FAK and its resulting phosphorylation on Y397 that provides a high affinity binding site for Src. These data support the further development of FAK kinase inhibitors as agents that have the potential to inhibit both tumour cell migration and proliferation.