ErbB-2 (also called HER2/neu) and ErbB-3 are closely related to the epidermal growth factor receptor (EGFR/ErbB-1), but unlike EGFR, ErbB-2 is a ligandless receptor, whereas ErbB-3 lacks tyrosine kinase activity. Hence, both ErbB-2 and ErbB-3 are active only in the context of ErbB heterodimers, and ErbB-2. ErbB-3 heterodimers, which are driven by neuregulin ligands, are the most prevalent and potent complexes. These stringently controlled heterodimers are repeatedly employed throughout embryonic development and dictate the establishment of several cell lineages through mesenchyme-epithelial inductive processes and the interactions of neurons with muscle, glia, and Schwann cells. Likewise, the potent combination of signaling pathways engaged by the heterodimers drives an aggressive phenotype of tumors of secretory epithelia, including breast and lung cancers. This review highlights recent structural insights into the mechanism of ligand-induced heterodimer formation, and concentrates on signaling pathways employed by ErbB-2 and ErbB-3 in normal and in malignant cells.