The ErbB-1 receptor tyrosine kinase binds to six different growth factors, whose prototype is the epidermal growth factor (EGF). Two homologous epithelial receptors, ErbB-3 and ErbB-4, bind all isoforms of another family of growth factors, the Neu differentiation factors (NDFs/neuregulins). The fourth member of the ErbB family, ErbB-2, acts as the preferred heterodimeric partner of ligand-occupied complexes of the three other ErbB proteins. Here we report that at high concentrations, EGF can induce cell growth and differentiation in the absence of ErbB-1. This function is shared by betacellulin, but not by three other ligands, including the transforming growth factor alpha (TGFalpha). The functional receptor was identified as a heterodimer between ErbB-3 and ErbB-2, a previously identified oncogenic complex. When singly expressed, neither ErbB-3 nor ErbB-2 can mediate signaling by EGF. In addition, when co-expressed, blocking either receptor by using site-specific antibodies inhibited EGF and betacellulin activities, indicating strict cooperativity between ErbB-3 and ErbB-2. Through analysis of chimeras between EGF and TGFalpha, we identified the middle portion of EGF (loop B) as the site that enables activation of ErbB-2/ErbB-3. In conclusion, cooperative and promiscuous binding of stroma-derived growth factors by the epithelium-expressed ErbB-2/ErbB-3 heterodimer may be significant to cancer development. The mechanistic implications of our results for a model that attributes receptor dimerization to ligand bivalency, as well as to a recently proposed mechanism of secondary dimerization, are discussed.