ErbB2 and ErbB3, members of the EGF receptor/ErbB family, form a heterodimer upon binding of a ligand, inducing the activation of Rac small G protein and Akt protein kinase for cell movement and survival, respectively. The enhanced ErbB3/ ErbB2 signaling causes tumorigenesis, invasion, and metastasis. We found here that the ErbB3/ErbB2 signaling is regulated by immunoglobulin-like Necl-2, which is down-regulated in various cancer cells and serves as a tumor suppressor. The extracellular region of ErbB3, but not ErbB2, interacted in cis with that of Necl-2. This interaction reduced the ligand-induced, ErbB2-catalyzed tyrosine phosphorylation of ErbB3 and inhibited the consequent ErbB3-mediated activation of Rac and Akt, resulting in the inhibition of cancer cell movement and survival. These inhibitory effects of Necl-2 were mediated by the protein-tyrosine phosphatase PTPN13 which interacted with the cytoplasmic tail of Necl-2. We describe here this novel mechanism for silencing of the ErbB3/ErbB2 signaling by Necl-2.ErbB2 and ErbB3 are members of the EGF receptor/ErbB family, which has ErbB1 and ErbB4 as additional members (1). ErbB2 and ErbB3 are also known as HER2/Neu and HER3, respectively. No ligands binding directly to ErbB2 have been identified yet, whereas heregulin (HRG) 3 -␣ and -, also known as neuregulin-1 and -2, respectively, directly bind to ErbB3. ErbB2 and ErbB3 have kinase domains in their cytoplasmic tails, but that of ErbB3 lacks kinase activity. Therefore, the homodimer of ErbB3 formed by binding of HRG does not transduce any intracellular signaling. By contrast, ErbB2 heterophilically interacts in cis with HRG-occupied ErbB3 and phosphorylates nine tyrosine residues of ErbB3, causing recruitment and activation of the p85 subunit of phosphoinositide 3-kinase (PI3K) and the subsequent activation of Rac small G protein and Akt protein kinase (2). The activation of Rac enhances cell movement and that of Akt prevents cell apoptosis (3).ErbB2 serves as an oncogenic protein (4), and amplification of the ErbB2 gene is observed in many types of cancers. For instance, it is amplified in ϳ3% of lung cancers, ϳ30% of breast cancers, ϳ20% of gastric cancers, and ϳ60% of ovarian cancers (5). Moreover, mutation of the ErbB2 gene is found in many types of cancers, namely, ϳ10% of lung cancers, ϳ4% of breast cancers, ϳ5% of gastric cancers, and ϳ3% of colorectal cancers (6). This gene amplification or mutation causes enhanced signaling for cell movement and survival, eventually resulting in tumorigenesis, invasiveness, and metastasis. On the basis of these properties of ErbB2, it has been recognized as a good target for cancer therapy; indeed, ErbB2-targeting drugs have already been developed and used clinically (7,8). However, it remains unknown whether ErbB2 is involved in oncogenesis in cancers in which its gene is not amplified or mutated. In addition, it was recently reported that overexpression of ErbB3 is also involved in tumor malignancy (9), but it remains unknown how ErbB3 serves as an oncogenic p...