Bidirectional signals mediated by membrane-anchored ephrins and Eph receptor tyrosine kinases have important functions in cell-cell recognition events, including those that occur during axon pathfinding and hindbrain segmentation. The reverse signal that is transduced into B-ephrin-expressing cells is thought to involve tyrosine phosphorylation of the signal's short, conserved carboxy-terminal cytoplasmic domain. The Src-homology-2 (SH2) domain proteins that associate with activated tyrosine-phosphorylated B-subclass ephrins have not been identified, nor has a defined cellular response to reverse signals been described. Here we show that the SH2/SH3 domain adaptor protein Grb4 binds to the cytoplasmic domain of B ephrins in a phosphotyrosine-dependent manner. In response to B-ephrin reverse signalling, cells increase FAK catalytic activity, redistribute paxillin, lose focal adhesions, round up, and disassemble F-actin-containing stress fibres. These cellular responses can be blocked in a dominant-negative fashion by expression of the isolated Grb4 SH2 domain. The Grb4 SH3 domains bind a unique set of other proteins that are implicated in cytoskeletal regulation, including the Cbl-associated protein (CAP/ponsin), the Abl-interacting protein-1 (Abi-1), dynamin, PAK1, hnRNPK and axin. These data provide a biochemical pathway whereby cytoskeletal regulators are recruited to Eph-ephrin bidirectional signalling complexes.