Bin1/M‐amphiphysin‐II is an amphiphysin‐II isoform highly expressed in transverse tubules of adult striated muscle and is implicated in their biogenesis. Bin1 contains a basic unique amino‐acid sequence, Exon10, which interacts with certain phosphoinositides such as phosphatidylinositol‐4,5‐bisphosphate (PI(4,5)P₂), to localize to membranes. Here we found that Exon10 also binds to the src homology 3 (SH3) domain of Bin1 itself, and hence blocks the binding of the SH3 domain to its canonical PxxP ligands, including dynamin. This blockage was released by addition of PI(4,5)P₂ in vitro or in cells overexpressing phosphatidylinositol 4‐phosphate 5‐kinase. The Exon10‐binding interface of the Bin1 SH3 domain largely overlapped with its PxxP‐binding interface. We also show that the PLCδ pleckstrin homology domain, another PI(4,5)P₂‐binding module, cannot substitute for Exon10 in Bin1 function in transverse tubule formation, and suggest the importance of the dual biochemical properties of Exon10 in myogenesis. Our results exemplify a novel mechanism of SH3 domain regulation, and suggest that the SH3‐mediated protein–protein interactions of Bin1 are regulated by Exon10 so that it may only occur when Bin1 localizes to certain submembrane areas.