Proper, graded communication between different cell types is essential for normal development and function. In the nervous system, heart, and for some cancer cells, part of this communication requires signaling by soluble and membrane-bound factors produced by the NRG1 gene. We have previously shown that glial-derived neurotrophic factors activate a rapid, localized release of soluble neuregulin from neuronal axons that can, in turn promote proper axoglial development (Esper, R. M., and Loeb, J. A. (2004) J. Neurosci. 24, 6218 -6227). Here we elucidate the mechanism of this localized, regulated release by implicating the delta isoform of protein kinase C (PKC). Blocking the PKC delta isoform with either rottlerin, a selective antagonist, or small interference RNA blocks the regulated release of neuregulin from both transfected cells and primary neuronal cultures. PKC activation also leads to the rapid phosphorylation of the pro-NRG1 cytoplasmic tail on serine residues adjacent to the membrane-spanning segment, that, when mutated markedly reduce the rate of NRG1 activity release. These findings implicate this specific PKC isoform as an important factor for the cleavage and neurotrophin-regulated release of soluble NRG1 forms that have important effects in nervous system development and disease.The neuregulins (NRGs) 2 are a family of growth and differentiation factors with a broad range of functions during development and in the adult. NRGs are necessary for glial and cardiac development and participate in a wide range of biologic processes ranging from proper formation of peripheral nerves and the neuromuscular junction to tumor growth (2-9). The NRGs have also been implicated as both potential mediators and therapeutic targets for a number of human diseases including cancer, schizophrenia, and multiple sclerosis (10 -12). NRGs function as mediators of cell-to-cell communication through a multitude of alternatively spliced isoforms arising from at least four distinct genes that bind to and activate members of the epidermal growth factor receptor family HER-2/3/4 (ErbB-2/3/4) (13)(14)(15)(16)(17)(18)(19).Although all known isoforms of the NRG1 gene have an epidermal growth factor-like domain sufficient to bind to and activate its receptors (20), products of this gene are divided into three classes based on structurally and functionally different N-terminal regions (21) The type I and II forms have a unique N-terminal, heparin-binding Ig-like domain (22)(23)(24)(25)(26). This Iglike domain potentiates the biological activities of soluble NRG1 forms and leads to their highly selective tissue distributions through its affinity for specific cell-surface heparan sulfates (12,20,27,28). These forms are first expressed as transmembrane precursors (pro-NRG1) that undergo proteolytic cleavage to release their soluble ectodomains. The type III NRG1 forms, on the other hand, are not typically released from cells, because their N-terminal domain consists of a cysteinerich domain that can serve as a membrane tether making t...