The group of subtype I transmembrane tyrosine kinases includes the epidermal growth factor (EGF) receptor (ErbB-1), an orphan receptor (ErbB-2), and two receptors for the Neu differentiation factor (NDF/heregulin), namely: ErbB-3 and ErbB-4. Here we addressed the distinct functions of the two NDF receptors by using an immunological approach. Two sets of monoclonal antibodies (mAbs) to ErbB-3 and ErbB-4 were generated through immunization with recombinant ectodomains of the corresponding receptors that were fused to immunoglobulin. We found that the shared ligand binds to highly immunogenic, but immunologically distinct sites of ErbB-3 and ErbB-4. NDF receptors differed also in their kinase activities; whereas the catalytic activity of ErbB-4 was activable by mAbs, ErbB-3 underwent no activation by mAbs in living cells. Likewise, down-regulation of ErbB-4, but not ErbB-3, was induced by certain mAbs. By using the generated mAbs, we found that the major NDF receptor on mammary epithelial cells is a heterodimer of ErbB-3 with ErbB-2, whereas an ErbB-1/ErbB-2 heterodimer, or an ErbB-1 homodimer, is the predominant species that binds EGF. Consistent with ErbB-2 being a shared receptor subunit, its tyrosine phosphorylation was increased by both heterologous ligands and it mediated a trans-inhibitory effect of NDF on EGF binding. Last, we show that the effect of NDF on differentiation of breast tumor cells can be mimicked by anti-ErbB-4 antibodies, but not by mAbs to ErbB-3. Nevertheless, an ErbB-3-specific mAb partially inhibited the effect of NDF on cellular differentiation. These results suggest that homodimers of ErbB-4 are biologically active, but heterodimerization of the kinase-defective ErbB-3, probably with ErbB-2, is essential for transmission of NDF signals through ErbB-3.