The erbB-2 receptor plays an important role in the prognosis of breast cancer. Amplification or overexpression of the erbB-2 proto-oncogene has been detected in 30% of breast cancers and is associated with poor patient prognosis. The significance of erbB-3 and erbB-4 in breast cancer is not yet known. The discovery of the growth factor heregulin (HRG) has allowed us to investigate a number of biological events that are regulated by erbB-2, -3, and -4 signal transduction. To determine the role of HRG in breast cancer tumor progression, we have developed an in vitro/in vivo model. We transfected HRG cDNA into the estrogen receptor (ER)-positive breast cancer cell line, MCF-7, and studied these cells as they progressed from a hormone-dependent to -independent phenotype. The biochemical and biological characteristics presented here demonstrate that overexpression of HRG induces morphological changes in MCF-7 cells as well as erbB-2, erbB-3, and erbB-4 autophosphorylation. MCF-7/ heregulin-transfected cells, which express relatively high levels of HRG, developed estrogen independence and resistance to antiestrogens in vitro and in vivo. This is consistent with a more aggressive hormone-independent phenotype. In contrast with control parental/wild-type cells, estradiol-mediated down-regulation of erbB-2 expression is blocked completely in this particular model system. These results indicate that HRG plays a role in the disruption of ER function. When a transient transfection with an ERE-CAT construct was introduced into these HRG-transfected MCF-7 cells, we observed that the ER was transcriptionally inactive. This suggests that ER signaling is altered in HRG-transfected cells. We observed that overexpression of HRG induces a more aggressive, hormone-independent phenotype that is most likely directly related to the constitutive activation of the erbB-2, erbB-3, and erbB-4 receptor signaling cascade. The data presented here suggest a close cross-regulation between the erbB-2/4 receptors and ER and provide new insights into the mechanism by which breast cancer cells acquire a hormone-independent phenotype.