Neu differentiation factor (NDF, also called neuregulin) is a potent inducer of epithelial cell proliferation and has been shown to induce mammary carcinomas in transgenic mice. Notwithstanding this proliferative effect, we have shown that a novel isoform of NDF can induce apoptosis when overexpressed. Here we report that this property also extends to other NDF isoforms and that the cytoplasmic portion of NDF is largely responsible for the apoptotic effect, whereas the proliferative activity is likely to depend upon the secreted version of NDF. In accordance with these contradictory properties, we find that tumors induced by NDF display extensive apoptosis in vivo. NDF is therefore an oncogene whose deregulation can induce transformation as well as apoptosis.