Heparin-binding EGF-like growth factor (HB-EGF) is a member of the epidermal growth factor (EGF) family, which bind to and activate EGF receptor (EGFR) and ErbB4. HB-EGF has been implicated in several physiological and pathological processes in mice, including heart muscle homeostasis, heart valve development, eyelid closure, skin wound healing, skin hyperplasia, lung development, blastocyst implantation and tumorigenesis. Like other EGF family members, HB-EGF is synthesized as a type I transmembrane protein (proHB-EGF). ProHB-EGF is biologically active as a juxtacrine growth factor that signals to neighboring cells in a non-diffusible manner; it also functions as the receptor for diphtheria toxin. ProHB-EGF is cleaved at its juxtamembrane domain by metalloproteases, in a process called ectodomain shedding. Ectodomain shedding of proHB-EGF yields soluble ectodomain of HB-EGF (sHB-EGF) and a remnant carboxy (C)-terminal fragment (HB-EGF-C). sHB-EGF is a potent mitogen and chemoattractant for cells expressing its cognate ErbB receptor. Studies of mice expressing an uncleavable mutant form indicate that the major functions of HB-EGF are mediated by sHB-EGF. Dysregulated shedding of HB-EGF can also cause severe abnormalities, as shown in knock-in mice expressing a transmembrane domain-truncated HB-EGF mutant. Thus, ectodomain shedding is a critical process that must be strictly controlled for HB-EGF to function. On the other hand, HB-EGF-C also functions as a signaling molecule. Subsequent to shedding, HB-EGF-C is phosphorylated and translocates into the nucleus, where it binds to and regulates several nuclear factors. HB-EGF has a high affinity for heparin and heparan sulfate, and the binding of heparan sulfate upregulates HB-EGF activity. Although the heparin-binding domain is not essential for the activity of HB-EGF, this domain suppresses the activity of the EGF-like domain, and binding of heparin or heparan sulfate to it removes the suppressive effect. Thus heparin sulfate proteoglycans (HSPGs) are also important regulators of HB-EGF functions.