In MDCK cells, hepatocyte growth factor/scatter factor (HGF/SF) induces epithelial cell dissociation, scattering, migration, growth and formation of branched tubular structures. By contrast, these cells neither scatter nor form tubular structures in response to the epidermal growth factor (EGF) family of growth factors. Heparin-binding EGF-like growth factor (HB-EGF) is a member of the EGF family of growth factors and is synthesized as a membrane-associated precursor molecule (proHB-EGF). ProHB-EGF is proteolytically cleaved to release a soluble ligand (sHB-EGF) that activates the EGF receptor. Although recent studies suggest possible physiological functions, the role of proHB-EGF remains largely undefined. Using MDCK cells stably expressing proHB-EGF, a noncleavable deletion mutant of proHB-EGF or soluble HB-EGF, we show that epithelial cell functions differ depending on the form of HB-EGF being expressed. Expression of noncleavable membrane-anchored HB-EGF promoted cell-matrix and cell-cell interactions and decreased cell migration, HGF/SF-induced cell scattering and formation of tubular structures. By contrast, expression of soluble HB-EGF induced increased cell migration, decreased cell-matrix and cell-cell interactions and promoted the development of long unbranched tubular structures in response to HGF/SF. These findings suggest that HB-EGF can not only modulate HGF/SF-induced cellular responses in MDCK cells but also that membrane-bound HB-EGF and soluble HB-EGF give rise to distinctly different effects on cell-cell and cell-extracellular matrix interactions.