Members of the epidermal growth factor (EGF) family of tyrosine kinase receptors are involved in the regulation of cell growth and differentiation, and are found to be expressed in many types of cancers. Activation of these receptors can be elicited by multiple ligands, resulting in the formation of a spectrum of heterodimer complexes and a number of biological outcomes. A clear demonstration of biological activation by a single complex has been difficult to address because of the endogenous expression of HERs (human EGF-like receptors) in many cell lines. We have generated a collection of cell lines expressing all HERs alone or in all pairwise combinations in a clone of NIH 3T3 cells (3T3-7d) devoid of detectable EGF receptor family members. Transformation, as measured by growth in soft agar, only occurred in cells expressing two different HER family members. Transformation with activated Neu and the rate of in vivo tumour formation were also correlated with the expression of multiple HERs in the same cell. To further our understanding of the role of heterodimer signalling, we demonstrated that, within a breast carcinoma cell line, activation of HER-3 results in cellular differentiation, prolonged activation of extracellular-signal-related kinase 1 (ERK1) activity and an increase in p21CIP1/WAF1 nuclear staining. In contrast, activation of HER-4 is mitogenic, induces transient activation of ERK1 activity and decreases the nuclear staining of p21CIP1/WAF1. These differences in biochemical and biological responses are correlated with the contrasting abilities of HER-3 and HER-4 to be down-regulated from the cell surface. The cell-surface localization of HER-3 does not change in response to ligand, whereas activation of HER-4 results in a loss of cell-surface staining followed by accumulation into a perinuclear compartment.