New differentiation factor (NDF), a member of the epidermal growth factor (EGF)-related peptide family, activates ErbB2 via heterodimerization with the NDF receptors ErbB3 and ErbB4. In a similar fashion, EGF receptor (EGFR) agonists induce heterodimers of EGFR and ErbB2. In this paper, we show that the ErbB2-overexpressing breast tumor cells SKBR3, AU565, and MDA-MB453 are growth inhibited by NDF. Cells with elevated levels of ErbB2 but little or no NDF receptors (SKOV3 and MDA-MB361) or cells with low levels of ErbB2 (T47D and MCF7) are not growth inhibited. None of the EGFR agonists tested (EGF, beta-cellulin, or heparin-binding EGF) inhibited growth of ErbB2-overexpressing cells. These results suggest that formation of an ErbB2/NDF receptor heterodimer, but not of an ErbB2/EGFR heterodimer, promotes growth inhibition. In addition, NDF caused a down-regulation of ErbB2 but not of ErbB3. The mechanism underlying the inhibitory effect was examined further in SKBR3 cells, which are 95% growth inhibited by NDF. A G(2)-M arrest is seen 24 h after NDF treatment, and increased apoptosis is detectable from day 2 onward, The results demonstrate for the first time that NDF induces apoptosis of tumor cells overexpressing ErbB2.