The sequence of the transmembrane (TM) helix of Erb b2, a member of the epidermal growth factor receptor family, can influence its activity. In this report, the sequence and lipid dependence of the transverse position of a model membrane-inserted peptide containing the Erb b2 TM helix and juxtamembrane (JM) residues was studied. For the Erb b2 TM helix inserted into phosphatidylcholine vesicles, the activating V664E mutation was found to induce a transverse shift involving the movement of the E residue towards the membrane surface. This shortened the effective length of the TM spanning portion of the sequence. The transverse shift was observed with both the E664 residue in the uncharged and charged state, but the extent of the shift was larger when the E residue was charged. When a series of hydrophilic residues was substituted for V664 the resulting transverse shifts at pH 7 decreased in the order D,H>E>Q>K>G>V. Except for His, this order is strongly correlated to that reported for the degree to which these substitutions induce cellular transformation when introduced into full length Erb b2. To examine the effect of lipid on transverse shift, the uncharged V664Q mutation was studied. The presence of 20% of the anionic lipid dioleoylphosphatidylserine (DOPS) in the model membrane vesicles, which introduces a physiologically relevant level of anionic lipid, did not affect the degree of transverse shift. However, in the case of a peptide containing a V674Q substitution, in which the Q is closer to the C-terminal of the Erb b2 TM helix than the N-terminal, transverse shift was suppressed in vesicles containing 20% DOPS. This suggests that the interaction of the cationic JM residues flanking the C-terminus of the Erb b2 TM helix interact with anionic lipids to anchor the C-terminal end of the TM helix. This anchoring site may act as a pivot which amplifies transverse movements of the Erb b2 TM segment to induce a large swinging-type motion in the extracellular domain of the protein, affecting Erb b2 activity. Interactions interrupting C-terminal JM residue association with anionic lipid might partly impact Erb b2 activity by disrupting this pivoting.