ErbB3 is a member of the epidermal growth factor (EGF) receptor subfamily of receptor tyrosine kinases and is believed to be a receptor for an unknown ligand. We have tested the possibility that heregulin, a growth factor possessing an EGF-like domain, is a ligand for ErbB3. We have found that the iodinated recombinant EGF-like domain of heregulin-beta 1 (125I-rHRG beta 1(177-244) bound specifically to insect cell-expressed bovine ErbB3 with a dissociation constant of 0.85 nM. Moreover, 125I-rHRG beta 1(177-244) bound to NIH3T3 fibroblasts stably transfected with bovine erbB3 with a dissociation constant of 60 pM, but did not bind to parental cells. 125I-rHRG beta 1(177-244) could be chemically cross-linked to a 170-180 kDa protein in erbB3-transfected fibroblasts, and the cross-linked product could be immunoprecipitated with antibodies specific for ErbB3. Finally, rHRG beta 1 stimulated the tyrosine phosphorylation of both ErbB3 and endogenous p185erbB2/neu in transfectants but not in parental cells. We conclude that ErbB3 is a receptor for HRG and is capable of mediating HRG-stimulated tyrosine phosphorylation of itself and p185erbB2/neu in cells that express both receptors.