The ephrins are a family of ligands that bind to Eph family receptor tyrosine kinases, and have been implicated in axon guidance and other patterning processes during vertebrate development. We describe here the identification and characterization of murine ephrin-B3. The cDNA encodes a 340 amino acid transmembrane molecule, most closely related to the two other known transmembrane ligands, ephrin-B1 and ephrin-B2. In addition to homology in their extracellular receptor binding domains, these transmembrane ligands share striking homology between their cytoplasmic domains, with 31 of the last 34 amino acids of ephrin-B3 being identical to ephrin-B2, suggesting functional interactions of the cytoplasmic tail. While most Eph family ligands are promiscuous in their interactions with Eph receptors, binding studies with the five receptors known to bind other transmembrane ligands only revealed a high affinity interaction of ephrin-B3 with EphB3, with a dissociation constant of approximately 1 nM. In situ hybridization of mouse embryos showed ephrin-B3 is expressed prominently at the dorsal and ventral midline of the neural tube, particularly in the floor plate, a structure with key functions in patterning the nervous system. The isolation of this ligand may help to elucidate the molecular basis of patterning activities at the neural tube midline.