Human MDA MB 231 cells were found to synthesize mostly the cell surface-associated precursor form of heparin-binding EGF-like growth factor (HB-EGF), a 27-kDa protein. Evidence for this form of HB-EGF included increased fluorescence intensity when cells were analyzed by flow cytometry using anti-HB-EGF antibodies, lack of HB-EGF in conditioned medium, and sensitivity to diphtheria toxin, for which HB-EGF is the receptor. Phorbol ester treatment of cells resulted, within 30 minutes, in loss of cell surface 27 kDA HB-EGF, lack of interaction with anti-HB-EGF antibodies, accumulation of active 21 kDa HB-EGF in conditioned medium, and the acquisition of diphtheria toxin resistance. It was concluded that cell surface-associated HB-EGF is the precursor of a bioactive growth factor, is biologically active as the receptor for diphtheria toxin, and is susceptible to rapid processing.