The shc genes encodes three widely expressed proteins of 46, 52 and 66 kDa. Overexpression of p46shc and p52shc in NIH3T3 fibroblasts induces a tumorigenic phenotype. Shc products are phosphorylated on tyrosine by the activated epidermal growth factor receptor (EGFR) and become physically associated with EGFR via their SH2 domain. Thus Shc oncoproteins may play a role in mitogenic signal transduction. Here we report that Shc products are substrates also of the erbB-2 kinase and form complexes with the erbB-2 product in intact cells. In vitro, the bacterially expressed Shc SH2 domain is sufficient to reconstitute the high affinity Shc/erbB-2 interaction. The erbB-2 region required for Shc binding was narrowed down to the most COOH-terminal 179 residues of gp185erbB-2; within this region, phosphorylation of one or more of the erbB-2 autophosphorylation sites is required for Shc/gp185erbB-2 complex formation as well as optimal phosphorylation of Shc products by the erbB-2 kinase. Thus, Shc proteins may play a role in signal transduction by gp185erbB-2.