The erbB-1 and erbB-2 protooncogenes encode homologous membrane receptors that respectively bind epidermal growth factor (EGF) and a still incompletely characterized ligand. Binding of EGF to its receptor is known to increase tyrosine phosphorylation of the erbB-2/neu receptor in tumor cells. To investigate the mechanism of this transregulatory pathway, we analyzed the interactions between the two receptors in SKBR-3 human breast carcinoma cells. Chemical cross-linking of 125I-labeled EGF revealed that the radiolabeled EGF receptor coimmunoprecipitates with the erbB-2/neu receptor. In addition a cross-linked species of 360-kdalton molecular mass is also coimmunoprecipitated. The formation of the latter species is absolutely dependent on the presence of EGF receptor and thus appears to represent a heterodimer of the erbB-1 and erbB-2 receptors. In vitro kinase reaction assays revealed that receptor heterodimerization is induced by EGF binding and leads to a dramatic increase in the self-phosphorylation capacity of the dimerized receptors. Moreover, analysis of living SKBR-3 cells suggested that most of the EGF-induced transregulation of the erbB-2/neu receptor is due to receptor heterodimerization. In conclusion, heterodimers of erbB-1 and erbB-2 receptors may provide a mechanism for dual transductory functions of growth factors of breast tumor cells.