The Shc protein helps to transmit signals from receptor and cytoplasmic tyrosine kinases to Ras. We have shown that several breast cancer cell lines (MDA-MB-453, BT474, MDA-MB-361, and SKBR3), which overexpress the ErbB2 receptor tyrosine kinase, contain constitutively tyrosine phosphorylated Shc. To investigate the role of Shc in these cells, we transfected them with a Shc-Y317F dominant-negative mutant defective in signaling to Ras. The transfectants were unable to form stable colonies, suggesting a critical role for Shc in the proliferation of these cells. In contrast, dominant-negative Shc transfectants of the nontransformed breast epithelial cell line HBL-100 grew normally. Surprisingly, cell cycle analysis of transfected SKBR3 cells suggested that the cells were blocked not only in G0-G1, but also in G2-M. The G2-M block was unexpected because Shc-Y317 is downstream of receptor tyrosine kinases that drive the early events in the cell cycle. Both the G0-G1 and G2-M arrest were rescued by transfection with wild-type Shc or oncogenic Ras 12V. Rescue by Ras suggests that Shc Y317 signals upstream of Ras, and that Shc to Ras effector pathways are involved in G2-M, although confirmation awaits a detailed molecular analysis. Most importantly, this work provides the first evidence for Shc involvement in G2-M.