ZAP-70 (Zeta-chain-associated protein kinase 70) is a tyrosine kinase that interacts directly with the activated T-cell receptor to transduce downstream signals, and is hence a major player in the regulation of the adaptive immune response. Dysfunction of ZAP-70 causes selective T cell deficiency that in turn results in persistent infections. ZAP-70 is activated by a variety of signals including phosphorylation of the kinase domain (KD), and binding of its regulatory tandem Src homology 2 (SH2) domains to the T cell receptor. The present study investigates molecular mechanisms of activation and inhibition of ZAP-70 via atomically detailed molecular dynamics simulation approaches. We report microsecond timescale simulations of five distinct states of the ZAP-70 KD, comprising apo, inhibited and three phosphorylated variants. Extensive analysis of local flexibility and correlated motions reveal crucial transitions between the states, thus elucidating crucial steps in the activation mechanism of the ZAP-70 KD. Furthermore, we rationalize previously observed staurosporine-bound crystal structures, suggesting that whilst the KD superficially resembles an "active-like" conformation, the inhibitor modulates the underlying protein dynamics and restricts it in a compact, rigid state inaccessible to ligands or cofactors. Finally, our analysis reveals a novel, potentially druggable pocket in close proximity to the activation loop of the kinase, and we subsequently use its structure in fragment-based virtual screening to develop a pharmacophore model. The pocket is distinct from classical type I or type II kinase pockets, and its discovery offers promise in future design of specific kinase inhibitors, whilst mutations in residues associated with this pocket are implicated in immunodeficiency in humans.