"Transactivation" of epidermal growth factor receptors (EGFRs) in response to activation of many G protein-coupled receptors (GPCRs) involves autocrine/paracrine shedding of heparin-binding EGF (HB-EGF). HB-EGF shedding involves proteolytic cleavage of a membrane-anchored precursor by incompletely characterized matrix metalloproteases. In COS-7 cells, alpha(2A)-adrenergic receptors (ARs) stimulate ERK phosphorylation via two distinct pathways, a transactivation pathway that involves the release of HB-EGF and the EGFR and an alternate pathway that is independent of both HB-EGF and the EGFR. We have developed a mixed culture system to study the mechanism of GPCR-mediated HB-EGF shedding in COS-7 cells. In this system, alpha(2A)AR expressing "donor" cells are co-cultured with "acceptor" cells lacking the alpha(2A)AR. Each population expresses a uniquely epitope-tagged ERK2 protein, allowing the selective measurement of ERK activation in the donor and acceptor cells. Stimulation with the alpha(2)AR selective agonist UK14304 rapidly increases ERK2 phosphorylation in both the donor and the acceptor cells. The acceptor cell response is sensitive to inhibitors of both the EGFR and HB-EGF, indicating that it results from the release of HB-EGF from the alpha(2A)AR-expressing donor cells. Experiments with various chemical inhibitors and dominant inhibitory mutants demonstrate that EGFR-dependent activation of the ERK cascade after alpha(2A)AR stimulation requires Gbetagamma subunits upstream and dynamin-dependent endocytosis downstream of HB-EGF shedding and EGFR activation, whereas Src kinase activity is required both for the release of HB-EGF and for HB-EGF-mediated ERK2 phosphorylation.