Amplification and overexpression of the HER-2 (neu/ erbB-2) gene in human breast cancer are clearly important events that lead to the transformation of mammary epithelial cells in approximately one-third of breast cancer patients. Heterodimer interactions between HER-2 and HER-3 (erbB-3) are activated by neu differentiation factor/heregulin (HRG), and HER-2/HER-3 heterodimers are constitutively activated in breast cancer cells with HER-2 gene amplification. This indicates that inhibition of HER-2/HER-3 heterodimer function may be an especially effective and unique strategy for blocking the HER-2-mediated transformation of breast cancer cells. Therefore, we constructed a bicistronic retroviral expression vector (pCMV-dn3) containing a dominant negative form of HER-3 in which most of the cytoplasmic domain was removed for introduction into cells. By using a bicistronic retroviral vector in which the antibiotic resistance gene and the gene of interest are driven by a single promoter, we attained 100% coordinate coexpression of antibiotic resistance with the gene of interest in target cell populations. Breast carcinoma cells with HER-2 gene amplification (21 MT-1 cells) and normal mammary epithelial cells without HER-2 gene amplification from the same patient (H16N-2 cells) were infected with pCMV-dn3 and assessed for HER-2/ HER-3 receptor tyrosine phosphorylation, p85PI 3-kinase and SHC protein activation, growth factor-dependent and -independent proliferation, and transformed growth in culture. Dominant negative HER-3 inhibited the HRG-induced activation of HER-2/HER-3 and signaling in H16N-2 and 21 MT-1 cells as well as the constitutive activation of HER-2/HER-3 and signaling in 21 MT-1 cells. Responses to exogenous HRG were strongly inhibited by dominant negative HER-3. In contrast, the proliferation of cells stimulated by epidermal growth factor was not apparently affected by dominant negative HER-3. The growth factor-independent proliferation and transformed growth of 21 MT-1 cells were also strongly inhibited by dominant negative HER-3 in anchorage-dependent and independent growth assays in culture. Furthermore, the HRG-induced or growth factor-independent proliferation of 21 MT-1 cells was inhibited by dominant negative HER-3, whereas the epidermal growth factor-induced proliferation of these cells was not: this indicates that dominant negative HER-3 preferentially inhibits proliferation induced by HER-2/HER-3.