Heregulin (HRG) is one of the groups of polypeptide growth factors that activate the erbB-2 receptor via induction of heterodimerization with erbB-3 and erbB-4 receptors. The biological effects of HRG have been extensively studied. The vast majority of the reports indicate that HRG induces cell growth in breast cancer cells expressing normal levels of erbB-2 and growth inhibition and apoptosis in cells over-expressing erbB-2. However, the mechanism by which HRG promotes cell growth inhibition and apoptosis is still unknown. Previously we reported that constitutive expression of HRG in an erbB-2-overexpressing cell line (SKBr-3) induced growth arrest and apoptosis. We also demonstrated that constitutive expression of HRG promoted a marked morphological change, G2/M delay of the cell cycle, and DNA fragmentation. In this study, we demonstrate the mechanism by which HRG induces these cellular effects. The doubling time of the SK/HRG cells increased in relation to the level of HRG expression, and the level of HRG expression dictates the morphological change of the cells as well as their ability to grow or not grow in an anchorage-independent manner. We demonstrate that these effects are accompanied by downregulation of both erbB-2 and erbB-3 receptors at the transcriptional and translational levels and that down-regulation of the erbB-receptors results in reduced receptor tyrosine phosphorylation. The decrease in erbB-receptor phosphorylation in turn results in a marked reduction of ERK activity and a significant increase in JNK activity. Consequently, overexpression of HRG promoted the expression of PEA3, an Ets nuclear transcription factor. Taken together, our data demonstrate that the cellular effects induced by constitutive expression of HRG in SKBr-3 cells are correlated with the level of HRG expression. This is a first report demonstrating that HRG induction of apoptosis is directly correlated with decreased MAPK activity, increased JNK activity resulting in upregulation of PEA3 and down-regulation of the erbB-2 receptor. Overall, these data provide important clues regarding the mechanism and downstream molecules involved in HRG induction of apoptosis that can be used as targets for therapeutic prevention.