The ErbB-2 receptor has been strongly implicated in the development of breast cancer. To establish a new model system to investigate the role of erbB-2 in tumorigenesis of the breast, the conditionally immortalised human mammary luminal epithelial cell line HB4a was transfected with erbB-2 cDNA. Biological and biochemical characterisation of the resulting cell lines demonstrated that high levels of ErbB-2 expression were sufficient to cause transformation in vitro but did not cause tumours in vivo. Transformation by overexpression of ErbB-2 correlated with ligand-independent tyrosine phosphorylation of ErbB-2 and the adaptor protein Shc. Over-expression of ErbB-2 also resulted in the ligand-independent constitutive association between Shc and another adaptor protein, Grb2, indicating that receptor activation was sufficient to activate downstream signalling pathways. Using the model described, it was found that elevation of ErbB-2 expression levels caused marked quantitative and qualitative alterations in responses to the ligands epidermal growth factor and heregulin. Data indicate a central role for ErbB-2 in mediating the responses induced by these ligands and suggest that these altered ligand-dependent responses play an important role in tumorigenesis in vivo.