The NRG4 gene is a member of a family of four genes that encode a class of epidermal growth factors. This gene has been reported to express a protein designated here as NRG4A1. We describe here a novel splice variant of the NRG4 gene, NRG4A2, which encodes a C-terminal region containing a predicted type I PDZ-binding peptide. Both NRG4A1 and NRG4A2 were shown to be expressed on the cell surface, as expected by the presence of a predicted transmembrane sequence, and were modified at a single N-linked glycosylation site in the extracellular domain. Significant stabilization of expression of both proteins was seen in the presence of the proteosome inhibitor MG-132 suggesting that they are normally degraded by this system. N-terminal cleavage was inhibited in both isotypes by the broad-spectrum matrix metalloproteinase inhibitor, galardin (GM 6001). A glycosylated, secreted form of NRG4A1 was detected in the cell medium which showed biological activity in two assays, phosphorylation of the HER4 receptor and stimulation of neurite formation in PC-12 cells stably expressing HER4. Transfection and expression of green fluorescent protein-tagged proteins and immunofluorescent staining with specific anti-peptide antibodies showed that NRG4A1 is localized to membrane ruffles, while NRG4A2 has a more punctate membrane distribution.