The transmembrane protein Kekkon 1 (Kek1) has previously been shown to act in a negative feedback loop to downregulate the Drosophila Epidermal Growth Factor Receptor (DER) during oogenesis. We show that this protein plays a similar role in other DER-mediated developmental processes. Structure-function analysis reveals that the extracellular Leucine-Rich Repeat(LRR) domains of Kek1 are critical for its function through direct association with DER, whereas its cytoplasmic domain is required for apical subcellular localization. In addition, the use of chimeric proteins between Kek1 extracellular and transmembrane domains fused to DER intracellular domain indicates that Kek1 forms an heterodimer with DER in vivo. To characterize more precisely the mechanism underlying the Kek1/DER interaction, we used mammalian ErbB/EGFR cell-based assays. We show that Kek1 is capable of physically interacting with each of the known members of the mammalian ErbB receptor family and that the Kek1/EGFR interaction inhibits growth factor binding, receptor autophosphorylation and Erk1/2 activation in response to EGF. Finally, in vivo experiments show that Kek1 expression potently suppresses the growth of mouse mammary tumor cells derived from aberrant ErbB receptors activation, but does not interfere with the growth of tumor cells derived from activated Ras. Our results underscore the possibility that Kek1 may be used experimentally to inhibit ErbB receptors and point to the possibility that, as yet uncharacterized, mammalian transmembrane LRR proteins might act as modulators of growth factor signalling.