In murine fibroblasts activation of the Shc/Grb-2 pathway by the ErbB-2 kinase involves tyrosine phosphorylation of Shc products and the formation of Shc/ErbB-2, Shc/Grb-2 and Grb-2/ErbB-2 complexes. Tyr 1139 of ErbB-2 bound to the Grb-2 SH2 domain in vitro as well as in intact cells. Tyr 1221 and 1248 are binding sites of gp185ErbB-2 for Shc SH2 domain in vitro whereas Tyr 1196 and 1248 are major binding sites of ErbB-2 for Shc PTB domain. Inhibition of Shc/ErbB-2 complex formation in intact cells was obtained by simultaneous mutational inactivation of Shc SH2 and Shc PTB binding sites of gp185ErbB-2. Shc/ErbB-2 complexes are formed upon activation of the ErbB-2 kinase and tyrosine phosphorylation of Shc proteins; they are located in both cytosol and cellular membranes. ErbB-2 activation induces also translocation of Grb-2 from cytosol to membranes. This network of protein-protein interactions may reflect the ability of the Shc/Grb-2 pathway to act as a molecular switch controlling different cellular functions regulated by RTK activation. In fact the Ras GDP exchanger mSOS was recruited in Grb-2/ErbB-2 complexes; furthermore besides mSOS, other polypeptides present in either cytosolic or membrane preparations were able to complex in vitro with Grb-2 SH3 domains.