ErbB-4 is a transmembrane receptor tyrosine kinase that regulates cell proliferation and differentiation. After binding of its ligand heregulin (HRG) or activation of protein kinase C (PKC) by 12-O-tetradecanoylphorbol-13-acetate (TPA), the ErbB-4 ectodomain is cleaved by a metalloprotease. We now report a subsequent cleavage by γ-secretase that releases the ErbB-4 intracellular domain from the membrane and facilitates its translocation to the nucleus. γ-Secretase cleavage was prevented by chemical inhibitors or a dominant negative presenilin. Inhibition of γ-secretase also prevented growth inhibition by HRG. γ-Secretase cleavage of ErbB-4 may represent another mechanism for receptor tyrosine kinase–mediated signaling.