Src tyrosine kinase regulates cell growth and adhesion through membrane signaling, and its deregulation is associated with cancer. Although active Src is anchored to the plasma membrane, the role of membrane lipids in its regulation remains unclear. Here, we report that Src self-associates via a lysine cluster in its SH4 region, a process mediated by lipids in human cells and in vitro. Mutation of the lysine cluster to arginine alters Src self-association and modulates its transforming function in human cells. Lipid-anchored micron-sized condensates of full-length Src form in supported homogeneous lipid bilayers (i.e., independently of lipid phase separation). Condensates also arise from the purified Src N-terminal regulatory element, which includes the myristoylated SH4 domain, the intrinsically disordered Unique domain, and the globular SH3 domain. However, the isolated SH4 domain alone forms small protein-lipid clusters rather than micron-sized condensates. Our findings reveal lipid-mediated kinase self-association as an additional regulatory mechanism for Src. This mechanism may also apply to other membrane-associated signaling proteins containing similar lysine clusters in their unstructured regions.